I'm extremely new to Knoppix too, so I'll help you the best I can.

What I've done is I've edited my sources.list file, and commented out all of the unstable / testing sources, because that way it's that little bit safer, and if you require an unstable package that you can't find online and compile yourself anyway, you can always uncomment it.

Apt-get update fetches a list of available packages using your sources.list file as a guide of which servers to check. It then caches these for you to browse at your leisure. For example, if you're after MPlayer, you should do "apt-cache search mplayer", and apt will return a list of available packages from those servers that you have cached that match that string.

Apt-get upgrade automatically ugprades any packages you have on your system that are older than those on the servers again pointed to by the sources.list file. If you have unstable sources and upgrade, you're asking for trouble in my opinion.

There's a tutorial on apt-get / dpkg as a sticky at the top of the HDD-install forum if you still have questions. If you can't find anything in there, then ask away.

By the way, your sources.list file will be in /etc/apt/

Cheers,

Karl.