I am using VMWare 8.0.6 to do all this.
I think you have to add some kernel modules to your minirt.gz because support for the SCSI device of VMWare is not included in the Linux kernel of Knoppix.

There is an old thread http://knoppix.net/forum/threads/293...or-root-device with a description of the creation of an IDE HDD for VMWare. Maybe that helps.