Flying Icons in Knoppix?

[utu]

...flying windows and panels, not icons...

I stand corrected. The description of flying windows sounds more like one of Compiz' more obnoxious effects than a bug.

You've ruled out all my guesses so far. I'm stumped.

Have you pored over system logs like dmesg, .xsession-errors, Xorg.0.log and syslog?
Does your LiveUSB cause these same effects on other machines?
Can you capture a Screenshot of this?
Have we ruled out failing hardware?