Maybe I'm answering something you've already done, but I'll carry on. You put only the CD in and then power up the computer. You are, a few seconds after the computer POSTs, then faced with the starting Knoppix screen and at the bottom is a prompt where you type "knoppix floppyconf" (or "knoppix floppyconfig") or some other commands (you can press F2 to bring up other options). When you see this screen, just place the floppy in the drive and type the above words, then press Enter.

Your problem seems to be that you are putting the floppy in the drive and the computer is trying to boot the floppy; it should be booting the CD instead.

I hope I have answered your question rather than telling you something you already know.