I have not really tried on 8Gb stick ,since I only have 0.5 , 1Gb and 2Gb sticks . The following experiment has been successful :

assume knoppix-dvd.iso mounted at /dvd/ ,stick mounted at /media/disk/ (formatted vfat ,made bootable just by syslinux )

cp -a /dvd/boot /media/disk
cp /media/disk/boot/isolinux/isolinux.cfg /media/disk/syslinux.cfg

edit /media/disk/syslinux.cfg and replace every instance linux (minirt.gz) with /boot/isolinux/linux ( /boot/isolinux/minirt.gz)

boot with usbstick it will look for the famous /KNOPPIX/KNOPPIX in any root_partition of hdd or usb or dvd

So either put in the dvd or cp the whole dvd-iso/KNOPPIX/ to any root_partition and you boot your knoppix-5.3.1 from usb which only has 512Mb size ! (16Mb should be sufficient )

On all my sticks (2x 512M 3x 1Gb 1x 2Gb ) I am able to make them boot without any special software ;just using plain livecd ubuntu (any other livecd sloud be ok too )
mkfs.vfat /dev/sdf
syslinux /dev/sdf
assuming /dev/sdf is where the hotplug recognised the stick !