Capricorny I have upgraded 80% of the packages available in Knoppix and I have installed at least 50 new applications which I need. My knoppix installation is 8 months old and I have 1.5 GB of free space on 4 GB flash drive, and its all thanks to BleachBit.
I can tell you why it is working so well. Almost 30% of the size of most applications are localization files which are totally unnecessary if you do not use other languages beside english, so whenever I upgrade a package and I cut off the localization files it takes very little space of the persistent image. I have locked some packages which I do not use much and I do not need them upgraded - such as the whole open office, the printing system and all libs and apps related to them.
BleachBit also has a whitelist and any directory marked in the whitelist will not get cleaned up. You might want to give it a try. I dont think I will run out of space any time soon, because any upgrade on already upgraded package doesn't take any space