GunSmoke,
I have developed, with some fiends here in Brazil, a script that does the remastering of the knoppix currently installed on the HD, which is posted at http://www.knoppix.net/forum/viewtopic.php?t=18222 and have faced the same problem you described. We solved it adding this code rsync -Ha --ignore-existing /etc/skel/ $HOME/ at line 67 of the 45xsession and deleting 26 lines, starting from the line nr 200 in the same file (45xsession). It worked perfectly, maybe you should try this, once it doesn´t touch the persistent home directory.
Cheers.
PS: I´m talking about the 3.7 version of knoppix. I didn´t try the 3.8.1 yet, which I think I´m doing today. I wil post if sucessful or not.