knoppix fb1024x768 xmodule=fbdev vga=normal
Hmm, perhaps your monitor doesn't support framebuffering, try:
knoppix lang=us screen=1024x768 xvrefresh=60
and then without the xvrefresh- thingy.

I had a strangish problem with dri a while back, seemed that in kxconfig the hardware detection chose generic i810 as display adapter, and when i chose intel it had three i810 chipsets to choose from, and the third one worked

"PCI: could not allocate resource for device 1.04" or something like that
Check your: lspci -v

Markus