An update to my previous post:

I have determined that real time display works properly after installing ethereal to Debian etch. This on a system with far less resources than the first one that Knoppix failed on (Knoppix fails on this one two) and with the same etting that fail under Knoppix. This is version 0.99.0, the same version as in Knoppix.

Any insight into the source of the problem still very much welcome.