Yes, I agree. I am taking a two-pronged approach.

I am systematically stripping out small sections and then testing the resultant remastered KNOPPIX. This is slow going.

I have installed Ubuntu 12.04. and have installed a "precise" debootstrap chroot. Using a Knoppix poor man's install, I can (like Capricorny) chroot into this file tree and have installed all the Knoppix debian packages. I am now doing the tedious reading of the init scripts. Fortunately for us, Klaus moved from a compiled C hwsetup to a shell-script version. This suggests to me that this might just be possible. I am struggling to come up to speed on cloop and aufs so that the permanence feature can be debugged successfully. I would appreciate a citation from anyone with a resource for the requisite "how-tos".

I am now envisioning a basic KNOPPIX compressed fs with minimal software, a KNOPPIX2 file containing the software of choice, utilizing the ramdisk fs method Klaus was discussing in the other thread.

The result should be a read-only OS/app system (secure) with an easily backed-up persistent home directory (with the attending app configs) that will run on any system (because of the great hw detection). In my case, it will have the added advantage of being more purely Debian, so that further dev. will be almost trivial.

I will move somewhat slowly due to the lack of large blocks of time. I would be happy to collaborate with anyone who has a more advanced knowledge (or more time than I). If you have Ubuntu already installed, the setup is incredibly easy.