I got 3.4 working on my Sony Vaio FX220 laptop with CPU Pentium 750 Mhz and 120MB RAM. It detected my school network easily and I could configure my external USB mouse and USB thumbdrive. I have not tested the modem yet though. Some of the websites say that my comp has a winmodem. I will resolve that when I have some free time.

Here are the summary of steps I took:
Used the knoppix-installler instead of knx-hdinstall script to do the install.
In the LILO dialog box I opted for Overwrite MBR (I was really scared that it will mess up my other OS.. but it did not)

Knoppix rocks!