In researching a distribution of linux called puppy linux I read that using CD-RW to place the OS onto could cause issues, it read that the reason for that was because of the multisession features of puppy linux multisession. I know it is a big longshot, but perhaps there is another reason for not using CD-RW other than it causing problems with multisession cd's that might be causing an issue in knoppix. Try reburning all of the discs that are on CD-RW's onto CD-R and see if that makes a difference. Also, I will try buring knoppix v3.7 (please send me a link for the location of that iso) onto CD-R, CD-RW and the same with v3.8 which I already have and v4.0.2 which I don't have and see if that makes any difference at all, a long shot I know...but why not try right