yes gcc is a working c-compiler, and it is ofcource available in Knoppix,
just what EXACTLY do you want? is it to compile staticaly just one or two minor programes or do you want to develop more serious things?
no matter what i would go with a hdd install, perhaps of Knoppix, or perhaps some other dist more aimed at hd install. say fedora (remember to incorporate development packages) mandrake, Slackware or Debian.
with a HD install things become simpler to some extent, you can add/remove programes easily and read/write files without much trouble.