JD -- Here's some ideas for you. Happy to be a guinea pig. I expect you or someone else will catch some errors.
So, you set your BIOS's boot order to boot first off the USB key, then off the hard disk. If it doesn't find a USB key, it boots into Windows. That what you're looking for?
Do you have a spare partition that's formatted any other way than NTFS? Because my experiments indicate that Knoppix won't boot from NTFS without the CD in the drive (it's accessed at that "Accessing KNOPPIX CDROM at..." line). It will boot without the CD from ext2 for sure, probably FAT32, ext3, and ReiserFS as well (not tested).
So, say you have hda2 formatted as ext2 (or anything else but NTFS). You create a /KNOPPIX directory on it and copy the big 679MB /KNOPPIX/KNOPPIX file off the CD to it.
Next, connect your USB key and run Knoppix from the CD. Get root in a console. If the USB key's not formatted, format it:
mkfs -t vfat /dev/sda1
Then, mount it -- mount /mnt/sda1
Copy the following files from the /boot/isolinux directory on the Knoppix CD (which is already mounted as /cdrom if you're running from the live CD) to the USB key:
Change the name of "isolinux.cfg" to "syslinux.cfg".
Say you want to use kernel 2.6. Edit syslinux.cfg so the first 2 lines read:
APPEND lang=us noapm vga=791 initrd=minirt26.gz fromhd=/dev/hda2 alsa
(Substitute your cheat codes, but leave the reference to "initrd=" and leave the "fromhd=" line -- that's what tells Knoppix to boot from hda2/KNOPPIX/KNOPPIX.)
Finally, umount your USB key and make it bootable with syslinux:
(A new file, "ldlinux.sys", should be on the key now.)
Test it. It should boot to the familiar Knoppix boot screen. Since you've added all your cheatcodes to "syslinux.cfg" all you have to do is press Enter -- or wait for the default timeout. I'm posting from Knoppix run that way now.