Kurtz25
When you enter ctrl+alt+F2 you actually entering as a new user with different previlage. What you just did with your "Device" won't work.

For knoppix-installer to work you need two partition:
1) Linux Swap (at least 128M depends how much ram you have)
2) Linux partition (EXT3)

I don't see you have created a linux partition, except fat32 and linux swap.