Okay , first may I advice you to take a book on how ip adressing works.
This is one of the rare books which ANY network admin MUST know.

Next if you're not planning on becoming one ,this is how it goes...

Not only ip is important,but subnetmask as well..
Two pc configured on a different subnet mask will never be able to talk to one another (ping will result in timed-out). The subnetmask of both have to be the same.

Check it ou on your XP (type ipconfig /all )
The mask should be 255.255.192.0 or 255.255.224.0 .
Accordingly this results in :
255.255.192.0 => with this mask you can use ip 169.254.64.1 till 169.254.127.254 and broadcast ip 168.254.127.255
255.255.224.0 => with this mask you can use ip 169.254.96.1 till 169.254.127.254 and broadcast ip 169.254.127.255

This are the settings to be used for your knoppix if you wish to able to talk to your XP.
Don't try anything else till a 'ping' command results in a real result and not a timed-out .

hope this'll help..

greetzzzz..