Oops -- You also need to download

extract_compressed_fs
and
create_compressed_fs

This is the mk_compressed script to compress the WORKING dir back to a compressed file system

Code:
mkisofs -R /mnt/hda7/WORKING  |  create_compressed_fs -   65536  > /mnt/hda7/CDROM/KNOPPIX/KNOPPIX
And this the iso creation script:

Code:
d /mnt/hda7/CDROM
mkisofs -r -J -b KNOPPIX/boot.img -c KNOPPIX/boot.cat   -o /mnt/myknoppix.iso  /mnt/hda7/CDROM
Make sure to change the hda7 to your drive from the first script.