I was remastering Knoppix 5.0.1. I upgraded KDE to 3.5.5, but resulting version failed to load KDE.

I fixed it by making following changes to /etc/X11/Xsession.d/45xsession file:
add line after "export KDE_FULLSESSION":
xprop -root -f KDE_FULL_SESSION 8t -set KDE_FULL_SESSION true
and change "LD_BIND_NOW" line to read:
LD_BIND_NOW=true start_kdeinit --new-startup +kcminit_startup

And if You by accident upgraded/installed kdm/xdm, don't forget to remove them from all runlevels.