I think you have got it quite wrong with KK and grub: Legacy grub always was there and in use with Knoppix, it's grub2 that runs against basic philosophies of a strict division between booting and running. Also, grub2 brings in loads of driver stuff into booting, which Knoppix has always demonstrated that doesn't need to be there. For me, the only significant booting capability of grub2 relative to legacy grub is the ability to boot ISO images. But - I don't want to use an ISO image for ordinary tasks, and for me, it's much more practical to use qemu/kvm to run an ISO image.

I think you know why 705 doesn't repartition a reiserfs USB drive by itself in order to install FAT32 booting.