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Hello again, Dave.

The Knoppix 7.6 LiveDVD iso itself is slightly too big for fat32.
The iso itself must be saved on a filesystem like ntfs or linux to begin with, not fat32.

The LiveUSB...

Hello, Dave.
What configuration of 7.6 are you using?
If it's a LiveDVD or a poor-man's install, you need persistence to keep your changes.
If you did an install to flash disk, that should be...