You may be right, after editing the knoppix-autoconfig to read:

HN="Knoppix-$(ifconfig eth0 | grep HWaddr | awk '{print $5}' | sed s/://g)"
echo $HN > /etc/hostname
sed -i s/^127\.0\.0\.1.*/127\.0\.0\.1\t$HN\ localhost/ /etc/hosts

hostname $HN

I now get eth hostname "knoppix-"

So apparently it's reading the file, but not pulling hte MAC address. Either knoppix doesn't know the MAC address at the time when the knoppix-autoconfig script runs, or you're connrect and the script isn't running properly due to the path. What is the proper path to AWK? /usr/lib/awk? Is that what I need in that script to get it to work?

Thanks for your reply. I need all the help I can get...