I'm afraid this is mostly Windows and ASUS specific questions, so it's not much to say about them from a purely Knoppix viewpoint.
For editing Windows config files, a Windows recovery disk is the safest, but as you have already backed up the data, you could try to mount the actual partition writable under Knoppix.
On my ASUS laptop (Win 7), I have to run a recovery disk creation procedure, resulting in 4 recovery DVDs. I'm not sure about the relation between those and the recovery partition, this is ASUS- and model-specific stuff, so what works for me (UL30VT and Win 7) may not work for you. "If all else fails, check the documentation".

It seems that you have made a very good start, good luck