I was getting the same error, and just want to note that I'm a noob, but that aside. And note that this is on a HDD that I am not using for anything else other than the knoppix install and was willing to wipe it clean.

so here's what I finally did, and it worked
booted from the CD
did the whole knoppix lang=us thing
waited for all to load
I hit CTRL-shft-f1
typed sudo cfdisk
deleted all the partitions
formatted the free space as primary (linux)
clicked write
(at this point I didn't even know how to get back to the desktop)
so I rebooted the CD
opened the terminal
typed sudo knoppix-installer
did step one
and step two in order
choosing all the defaults like beginner, etc
and then it formatted and installed without any problems.