As far as I know Knoppix 6.2.1 does not use the home=/dev/sd* boot parameter. It makes use of a persistent image, usually knoppix-data.img in knoppix_dir. If you use the toram option everything from knoppix_dir is copied to RAM. If you have a persistent image in that directory it is also copied and its contents is united with the filesystem. After having copied all the files to RAM the system forgets where the files came from. This has one disadvantage: All changes are saved inside that persistent image but they are lost after shutdown or reboot because there is not procedure to save the persistent image back to disk. If you can solve this problem then toram might be an option for a ramdisk based system. The modifications I think can be made in /etc/init.d/knoppix-halt.

Another approach would be to modify the init inside minirt.gz so that one can tell the system to use a persistent image somewhere else instead of knoppix_dir. Maybe one can introduce two boot options datahd and data_dir with datahd the device name and data_dir the directory name of the persistent image's location.