Small update:
1. Installed several Java packages to make it more complete for server use, purging things like gnucash and evolution to make space. Will copy cloop+persistent into existing 7.0.2 VMs afterwards. Groovy, Grails, Tomcat and JBoss installed, pluss Oracle Java EE 6 w/Glassfish3. Glassfish etc turned out to be very bulky, ca 550MB, and I moved it to /var/lib to get it out of the compressed image, to keep that down at ca 4GB. I think things like Java development and server may be good candidates for KNOPPIX2 cloops - also because of possible version changes. The same may apply to other specialized program suits. Will look more into this, as it is very tempting to have everything in a 4GB image..

2. On an i7-2630 with a slow HD, the process (running script listed above) took about 32 mins, with almost half of it spent creating isofs. Will try out with squashfs later, possibly together with SSD.

3. One reason for stuffing all kinds of programs into one compressed image, is the simplicity of setting up development and testing environments: Just copy Knoppix VMs, and run different servers on different VMs. Two Windows XP and two Knoppixes ran very smoothly in testing under VMware workstation 8, and when virtual Knoppix is started in runlevel 3, it doesn't draw much resources when idle.