I'm sure the experts will have more to say on this topic, but in nearly 8 months of using Linux I've never had my system completely lockup like that. I'm assuming you're using a hard disk install of Knoppix 3.7? Otherwise a reboot should have cleared everything.

A couple things that might help:

First, on the topic of Wine: Wine is an application in constant development. By the time a distro is released, the version of Wine on that distro is old. The version of Wine you have on Knoppix 3.7 is ancient. The first thing I would do is update it to the latest version on the repository (current version on the Debian Sid repository is 20050524 when I last checked) using apt-get or Synaptic. Even this is "old" by Wine standards, but is more current than what you are trying to use. When you are up to the task (I'm just learning now), the way to get the most current version of Wine is to compile it yourself from the CVS resources. I haven't done this yet, but it's on my "to do" list for this week.

Next you have to make sure you've set up Wine correctly. Older versions of Wine allowed you to use an existing Windoze partition for source .dll's. This lead to problems (and perhaps the source of your problem) and is no longer recommended. Go to http://www.winehq.org and read-up on setting up Wine.

Another thing about Wine, it usually helps to launch the Windows ".exe" from a terminal window and from the directory where the file resides. Incidently, I've gotten most of my help from the Wine newsgroup "comp.emulators.ms-windows.wine".

On the topic of application crashes: First, you want to always make sure you are logged in as a normal user when you start experimenting with stuff like Wine. That way if you really foul things up, you can log in as root and either delete the old user or fix it. If an application crashes on me, I'm usually able to "kill" it by pressing: CTRL - ALT - ESC . This brings up a black skull and crossbones cursor and any app that you click on with that will usually immediately clear from the system. This fixes 99% of my crashes. For the other 1% I've had to reboot, but one of the Linux experts might have better ideas.

Hope this helps