just in case anyone is reading this thread ...
i thought i would answer my own question ...

i'm not 100% positive, but i think the deal is the knoppix kernel
only understands rock ridge, and not ISO9660 ?

that seems a little crazy, as i would think ISO would be a pre-requisite for rock ridge maybe ...

im using cdimage to make the image with, and my image is pure ISO9660 (no Joliet or rock ridge). my root folder is definetely KNOPPIX (all uppercase, as lowercase is not allowed in ISO9660 ... hmm ... i wonder if therein could be the problem) ....

anyways, im going to try and get this ironed out by moving everything over to an ext2 filesystem and start using mkisofs .... i'm such a doofus for trying to do this under windows + FAT anyways !

but im almost positive the problem has to do with not having the right CD filestructure or possibly filenames (and case sensitivity) ....

so if anyone was ever wondering if you really needed that -J switch and -r switch for rock ridge and Joliet , im thinking the answer is YES ...