I'm seeing the same exact error messages you just described as well.

I have winxp and win98 on my first 2 partitions, and using partition magic8 I've installed 2 linux partitions and linux swap, installed to the root partition, not the MBR (in order to leave the windows boot menu alone).

This means I have to boot off of floppy in order to get into my new HD installation of knoppix, and when I do, LILO recognizes my linux partitions and gives me a choice, then it starts booting from the HD then I see the panic message you described.

I wonder what is necessary in order to get it to dual boot with XP/98; does linux have to be in the FIRST partition?