OK! A few hours of playing around, I have made some progress!
I copied the Knoppix directory from the livecd to a fat32 partition, then ran mkfloppy, so I now have the OS booting from the floppy and HDD! Great, so far so good,

Questions:
1. How do I get the floppy to boot my configuration and make sure that Knoppix uses the swapfile I set up and the persistant home?
2. Is there any way to speed up the boot by moving more of it to the HD and just pointing to it from the floppy?
3. My sound has stopped working, it worked before, but now has stopped, I am using an IBM Thinkpad A30.
Any clues?
Thank you!