This is how I run Knoppix v3.1 from my hard disk (under Windows XP SP1 FAT32)

Run Knoppix from the CD Rom
Setup and save configurations to a blank and formatted diskette
(K->KNOPPIX->Configure->Save KNOPPIX Configurations)
Copy the contents of the CD to a partition
Edit X:\KNOPPIX\mkfloppy.bat to rawrite2 -f boot-en.img -d A (for English)
Where X is the location of the contents of the Knoppix CD
Insert a blank and formatted diskette
Run mkfloppy.bat to create a bootable floppy
Copy your configurations to the Knoppix directory on your hard disk
Change your BIOS to boot from floppy
Insert the bootup floppy
At the Boot prompt, type knoppix floppyconfig
(If you don't type anything at the Boot prompt, Knoppix will run and detect your configurations)

If you want to add anything, please edit the whole message and post the instructions in full for the benefit of newbies like meself

One bug that I discovered is that after rebooting to WinXP, I have to query the external modem before I could use it