I installed Knoppix 7.2 DVD on a flashdrive. I also had trouble with the time. I read through the information posted by others.
I editted this file on my flash drive ... k:\boot\syslinux\syslinux.cfg

In my original syslinux.cfg file , the following records appear at lines 17,18 and 19.

LABEL knoppix
KERNEL linux
APPEND lang=en apm=power-off initrd=minirt.gz nomce libata.force=noncq hpsa.hpsa_allow_any=1 loglevel=1

I added "tz=localtime" at the end of record 19 , which starts with APPEND.

APPEND lang=en apm=power-off initrd=minirt.gz nomce libata.force=noncq hpsa.hpsa_allow_any=1 loglevel=1 tz=localtime

then saved the file.

I then restarted the computer , booting from the flashdrive .
The correct time is now displayed .