Hummingbird,

You should not be extracting the KNOPPIX_V5.3.1DVD-2008-03-26-EN.iso file with winace... but using that file with Imgburn.
Imgburn is a free and single purpose ustility for doing the one thing you need to do. In effect you are making an exact copy of Klaus Knopper's dvd. This involves making it bootable as well as putting files on the dvd. Trust Harry on this... as he is the most staunch advocate for running from cd/dvd rom drives... he has probably burned more disk's and helped more people than anyone here. I don't know if he runs Windows, but I still have to, and Imgburn is what you need. When in windows... I don't use anything but Imgburn.

After installing Imgburn... in a new Explorer window... you should be able to right click the KNOPPIX_V5.3.1DVD-2008-03-26-EN.iso file and select "Burn using Imgburn" if you let Imgburn associate files with the "iso" extension to itself when you install. Setting the burn speed to whatever it allows below 4.x is recommended by me and Harry for sure... My little AMD 2400+ cpu can't do 4.x speeds, in DVD burning terms... but my lovely wife and her lovely new machine can do 8.x DVD burns without a hitch. If that is too hard for you then you may need to ask someone who knows about burning bootable DVD's.

Good Luck.