COPY KNOPPIX CD TO FAT32 DRIVE VS >>?

Hi

I have just copied the Knoppix CD to my empty D drive (1 gig).
Made a boot disk, and great, its running without cd.(Bios set to boot from A now).
What I've seen:

1. I can't create a swap file now for some reason. It says there is no available dos partition? Why? My C drive is available as HDA1. (It is 5 gigs with 1.7 gigs free)
2. It detects cdrom. Very nice cause someone else's post said it could not.
3. Still cant detect backpack burner but thats okay for now. Not a priority. I will learn how to 'mount' peripherals, I suppose.

Now, what is wrong with this type of install?
You can't do upgrades to things like KDE as long as they are all in compressed file, right? (or wrong?).
I gather you can do a decompression to a partition using some feature of Knoppix I haven't understood as of yet. Does it have to be a certain type of partition, or can you even do a debian install to Fat32 drive?

Anything else I should be aware of?
~S~