You'll want to watch out for /etc/lilo.conf as well. You should make a new target for the origional knoppix installed kernel, as it uses an ramdisk (initrd=).

You'll want to manage /vmlinuz and /vmlinuz.old as 'optional' targets for lilo so it won't throw a fit.

When making your kernel, make sure that you don't use initrd (unless you have a reason to), and compile ext2 + ext3 as INTERNAL options, and not modules.

And keep using make-kpkg, after these tips you'll be on your way. The default knoppix kernel config is usualy in /usr/src/ ... poke around there.