If I'm understanding you correctly, you want to both run Knoppix and load your persistent home from a DVD, without copying anything to a hard drive, right?

(I'm no expert, and the hour is late, so all this is open to correction.)

You could certainly save your "persistent disk image" (it's more than just a "persistent home" now) to a DVD-RW after you were done using it, but you couldn't run it from there. How could you?

AFAICT, in order to create/use a persistent disk image, Knoppix needs read-write access to a file -- be it on a hard disk partition (even NTFS now!), a USB thumbdrive, or a removable disk. The use of unionfs hasn't changed that. It's not all loaded into memory. Do you know of a DVD-R drive that will read from and burn to the same file in real time?

As I understand it, unionfs is a virtual file system that overlays "real" file systems on top of each other and makes it seem like they're all combined, invisible to the end user. In Knoppix's case, at the bottom there's the read-only CD filesystem. On top of that, there's the read-write ramdisk. On top of that (taking precedence over both) is the read-write persistent disk image. If you do an "apt-get update && apt-get install kdegames", the APT data and DEB package is written to the /var directory in your persistent disk image, and the binaries are written to the /usr directory (the directories are created if they don't exist). Since the data is written to your persistent disk image, it's still there the next time you run Knoppix.

If you did the same thing without a persistent disk image, it would work, but the data would be written to the ramdisk, and would disappear when the computer was shut down.

(The old-style persistent home also still works -- where all you're storing is the contents of /home/knoppix -- but then it's not mounted with unionfs.)