Actually, creating a persistant Knoppix image just creates an image on the hard drive of the /home
directory and saves system settings in that image file. The default size is 100MB. This saves your /home directory and everything in it, while saving the configuration just saves configuration settings (network,printer,desktop,etc). I know saving /home directory on a local hard drive will be automatically recognized on next boot. Using "knoppix tohd=/dev/hda2" as a cheat code while booting is what will copy the knoppix cd image to a partition like you are talking about. And that is what will take a lot of storage space, but not saving configuration or home directory.