Having used both Ubuntu 10.10 and Knoppix 6.4.3 both for some time now,
I can offer the following amendments to my initial endorsement of 10.10.

A basic deciding factor for me is that my internal wifi is a Broadcom
unit which requires a 'non-free' driver, wl.
Knoppix 6.4.3 installs this driver with no problem at all.

Ubuntu is the only other current LiveUSB distro I've tried that does install wl.
It does so seemingly reluctantly, and not without some problems thereafter.
After finally installing wl, subsequent Synaptic operations seem very clumsy.
Something about redo-ing initramfs seems to take a long time,
with error messages that make you wonder if all went well or not.
As far as I can tell, Synaptic is doing its thing, but not happy working
around the 'non-free' driver's invasion into its neighborhood.

No such problems arise in Ubuntu using an external RTL8187L wifi adapter,
it may be noted.

So, assuming living with one's internal Broadcom wifi is one objective,
and insisting on reliable access to Synaptic is another:
taming LXDE/PCManFM imperfections in Knoppix 6.4.3, currently yields
a more satisfactory final result, than does dealing with a 'non-free'
driver problem in Ubuntu 10.10.