Does your CD-rom make odd sounds when it starts? if so try using a other device if you can find one. But before doing so start by trying the 'knoppix testcd' bootoption. I don't know how you have burned the iso-file, but I could imgaine that using a Windoze could cause problems

Besides have you ever checked the RAM with eg. memtest86 (http://www.memtest86.com/) I read that they should have a bootable CD-image.

Finally your 640 MB RAM - if anything else fail I would try booting with only one RAM block, or two similar blocks.

Good luck