I had the same problem with Knoppix 4.0.2 booting up part way from CD (in my DVD drive) then not being able to find the DVD drive. My SATA disk was the master on controller 1 and the DVD drive was the master on controller 3. This configuration worked for XP and Knoppix 3.4 with the 2.4 Linux kernel. I tried changing my BIOS settings to make the DVD drive the master on controller 1 and the hard disk the master on controller 2 and then it was able to find the DVD drive when booting the new version of Knoppix from CD with the 2.6 kernel.