I had a very similar problem. The CD was just peachy, but the BIOS would not boot it.

I had to make a boot disk, you may have to as well. Here is where I downloaded mine from:
http://www.angelfire.com/ultra/eco2g...pix-stuff.html

There are disks for three versions, you will need disk one and two for your version. Just put disk one and the CD in at boot and tell it to boot from floppy. Then after you reach the boot screen and tell Knoppix to boot another screen comes up asking for the second disk. Put it in and you're good.

It is a pain though if you are planning to always run it from the CD.