I know people use some lilo tricks which is the kernel and initrd still sits on the HD but the lilo boot sector(and/or the map file) is written to the floppy. This should greatly speed up your booting.

In fact I used a similar setup but instead of the boot floppy, I tell lilo to write to /dev/loop0 which I mount to a file and take out the first 512 byte of it to give it to XP loader.

To summerize, you can use lilo to write just the boot sector to a floppy with everything else still sitting on a VFAT partition.

To simplify the management, I just put all of them under \KNOPPIX, this is completely non-intrusive to a Window environment(just give me a directory to store my files).

The only downside of lilo is that you need to do this on every machine as the map files are raw disk sector numbers and it doesn't understand file system at all and if you ever move the files(vmlinuz and miniroot.gz), the whole thing needs to be redo again.

Another alternative is to use a CD-ROM as the boot floppy, that is to build the CD-R which contains only the boot image etc. but not the real 700M KNOPPIX which will sit on the HD. Since the vmlinuz and initrd seldom changes(I can use the CEBIT version on all KNOPPIX till now), it should be allright. The size is also very small(only about 1.44M) so you can use mini-CD(or even business card size CD) and it is very fast to burn.