I made the same mistake, although there was nothing in O'Reilly's Knoppix Pocket Reference about this. I tried NO myconf, and home=scan. I had previously created a bin under /home/knoppix, and rebooted. It wasn't displayed consequently. When I tried only home=scan, it showed up fine. I also had a number of errors attempting to overwrite firefox subdirectories in my home directory at first, but not with only home=scan.

Also, I had tried home=/dev/sda1/knoppix.img. The persistent home wasn't picked up. When you are successful, you should see a text options screen, indicating that image has been found in /media/sda1.

Let me know if this works for you.