The Morphix guy has several tools Klaus should think about adding that would meet Knoppix needs and Debian needs. The morphix site has an apt-to-cloop transfer program. I think a Knoppix CD with modules would serve more needs. If the software was in bundles than other people could build modules for their favorite stuff wo bothering Klaus every time they want something added. Users could customoize their own disc by using the base Knoppix from Klaus and several others. Want DVD, use bigger cloops, want gnome instead of kde, someone could do that.
That would free up Klaus' time to only have to release a base CD a couple times a year. He could make his base 100% GPL to satisfy the debian crowd while having the non-free stuff in a module for everyone else. It would be the opposite of Gentoo, with portabilty and ease of use over customization. Also, cloop like in Morphix could make a cool package format with drag-n-drop programs. [based on apt to reduce duplicated effort!]
The single CD feature needs to stay. Personally, I love it. On windows boxes at work, I can use linux, and integrate it into my workflow, without inturruption to the use of my PC to other people. I'd dread to HDD install right now [except maybe the copy method] The way Knoppix takes care of itself goes away with the HDD install...the main reason I use it over several other distros I've tried. It will always reset unless you tell it not to. Great for experimenting, getting your hands dirty and breaking things! I suppose with some effort [your idea] the HDD install could be worked on to have all the Knoppix goodness, but on a HDD. The trouble is though, that the "burned CD" approach is what makes support for knoppix [like here] so much easier than for other distros. If everyone installs to HDD and starts compiling programs, much of the "commonality" is lost and it becomes Just-another-distro.