Versatile Spellcaster to cast Wizard spells

Every time Ultimate Magus is mentioned on a forum, someone adds that Versatile Spellcaster would be great with it. I do not see how.

Versatile Spellcaster (Races of the Dragon, p. 101):

You can use two spell slots of the same level to cast a spell you know that is one level higher.

Does a Wizard know any spells?
He has clearly some in his spell book, he has some prepared, but what does he know?