@patelbhavesh: thanks for the pointer to Debian Live. I got Debian 7.3 up and running and installed the live-build tools and made a Wheezy iive with just the LXDE desktop and no extra applications. ISO is 745 MiB, and I don't even have a browser in it. It will take a lot of work to slim it down to fit on a 700 MiB CD. Klaus Knopper has already made a fine job of of trimming and slimming down a live Wheezy, and that is why I would like to start with a basic Knoppix.
Fun fact: I have tried a full remaster of a Knoppix 7.2.0 CD. All I did was remove Gimp. The compressed cloop was larger than the original one, even though I tried all the settings to get the smallest possible cloop. Klaus knows a few tricks allright !