Update: Not sure how relevant to this specific thread, but I think I solved the entire issue by redistributing the entire pendrive installation on my flash drive.
I did as follows:
1. format entire drive, make bootable (using whichever way you wish)
2. create second partition in roughly the size of your knoppix cd (dvd in my case) and copy the contents of the cd/dvd into it, then resize so you can squeeze all the free space back to the first partition.
3. copy the contents of the boot dir into the first partition, so it will boot to the knoppix cheatcode screen, then hand the process over to the full image in the second partition.
4. (optional) copy backed up contents of the data partition into the first partition.

Now the deal is simple: I want a data partition accessible on windows machines (with portableApps on it, of course), and I want the flash drive to boot knoppix where possible (depending on machine).

I'm not entirely sure how it will affect all the drives on desktop being mounted/bound to /cdrom, but I suspect that issue had much to do with the fact that the flash drive being an hdd and not the cd rom, or any cd rom for that matter, warped the way knoppix detects devices at startup and links them to the desktop.
Hopefully this will change for the better.
Might have to use fromhd= for this, haven't checked yet.