Could this be included in Knoppix or not? I have read the Open Watcom license (OSI approved), but I don't know enough of license-speak to know whether this license allows inclusion of Open Watcom C/C++ to Knoppix or not.

While Open Watcom C/C++ (http://www.openwatcom.org/) doesn't yet have linux version, the basic programs do work e.g. under dosemu http://www.dosemu.org/ (after you install win32 version using wine)

Open Watcom C/C++ is one of the few compilers to still support the creation of 16-bit MSDOS programs (among other targets), and at least for me this is quite important.

License v1.0 http://www.openwatcom.org/license.html
Draft license v2.0 (PDF) http://openwatcom.mirrors.pair.com/