The only difference I am guessing is that files are more compressed in the CD-ROM than on the DVD. Am I right?
It is not more compressed but there are simply more files on the DVD as compared to the CD. The CD uncompressed is about 1.9 GB of files and the DVD uncompressed is about 9GB of files.
If so, I would imagine that running from a Knoppix Live DVD would be faster than running from a CD-ROM (since it would take less time in decompressing the files from the DVD for them to be run on RAM). Is that correct?
Probably not since the de/compression routine is the same for both CD & DVD. If you see a speed difference, it could be attibuted to CDR versus DVDR media or the speed of the drive itself.