how to create a persistent overlay in knoppix 6.2

I have just downloaded and run knoppix 6.2 DVD in live mode. Very impressed by the performance on the hardware front. It automatically detected my sound card, set-up networking easily for internet connectivity and shutdown went smoothly which were issues for other operating systems I tested so far except XP.

However, two fundamental things are disturbing.

1. The speed is slow presumably for running from DVD. I have an old Dell Optiplex GX1 500 Mhz CPU with 512 MB RAM. It does not support booting from USB drive though I have one 8 GB Kingston DataTraveller USB drive for use. Should I install Knoppix 6.2 to USB or to hard disk?

2. I am unable to create persistent overlay or persistent image from the live session. So all chages made were lost on reboot. If I do not want to install to hard disk or USB drive, then how to create persistence between reboots?

Thanks.