Can't you just copy \KNOPPIX\KNOPPIX from the CD to c:\ and make a boot floppy ?

As far as I understand, you need to boot into KNOPPIX to install it and the above method would boot KNOPPIX.

An alternative way would be to start KNOPPIX on one machine(the one you can boot with the CD-ROM) and start the terminal server then remote boot on the other machine, either using floppy or may be bootp/PXE(?)