knoppix 742 where did my 4gig dl go?

i noticed on distrowatch that there was an updated version of knoppix which included a fix for shellshock.
yippee!
however, they only showed a link for a 4g file.
knowing that the documentation mentions somewhere that a knoppix cd can include 2gig of software due to some fancy "when used" compression, i wondered what the 4g dl, i.e. 12 gig of actual software, could possibly include.
i decided that whatever it was - i didn't need it, probably, as i more than happy with the standard release.
so i went to the knoppix site to find a cd dl.
when i couldn't find one (i looked on a number of mirror sites too),
i bit the bullet and dl'd the 4 gig ... which, thanks to sky broadband, would take some time.
when the dl had finished, i verified it with both the md5 & sha1 checksums.
all was well ...

using the flash-knoppix instructions here:
http://knopper.net/knoppix/knoppix742-en.html
i created a bootable flash drive using a 16g kingston.
problem, the bootable partition had only used 743meg
i.e. far less than the 4g i had dl'd.
clearly, it hadn't worked.
so i wiped the pendrive (gparted) ... and started again.
but it was the same ...

question:
what happened to the 4gig file i dl'd?

p.s.
is there any chance of "expanding" on the flash-knoppix instructions plz?
e.g.
1) maybe explain just what an "overlay" file is.
2) certainly detail what minimum size (and type!) partitions are needed.

the reason i make these suggestions:
1)
i initially partitioned my pendrive, before using flash-knoppix, making a 4gig (the size of the file i had dl'd) and the rest of it (12g) ext4.
flash-knoppix didn't like the ext4 so i ended up zapping the entire drive.
2)
if the util is only going to put 743meg on the boot partition then i am wasting over 3gb of my drive.
on the other hand, if it IS going to use the space themn plez tell me what for AND what the optimum size should be.
3)
no-body mentioned it needing a reiserfs partition. ok, if i had been more knoppix savy then i might have guessed. but instructions should not be written for the savy - they should be written for noobs.