I notice some peculiar things about tz=localtime in my situation,
where I keep my hardware clock set to local time, and I prefer to see
this local time on any desktop I might be using. The Windows 7 desktop
has no problem with this arrangement, of course. But on this same machine...

My Knoppix 7.0.5 LiveUSB has tz=localtime on the APPEND line of syslinux.cfg;
My Knoppix 7.2 LiveCD has tz=localtime on neither the DEFAULT line nor the APPEND line; and
My Knoppix 7.2 LiveCD-size LiveUSB requires tz=localtime on the DEFAULT line.