I suppose there is a simpler soultion to botting knoppix from CD.

In this case i had Rh7.2 installed first, and didn't want to spoil my MBR, like you.
So i did the following:
1) Make lilo boot floppy (which u couldn't)
2) Turned it into a CD. I dont really trust floppies......
3) whenever i boot, even if i have removed Rh 7.2 from the hdd, and put DamnSmallLinux, whcih i have done now..... Lilo still loads DSl if i type "Linux" at boot........... Isn't that a simpler way to do that?
Install your linux on a removable drive, and then mklilo from the same thing........ That worked for me. I guess linux acutally means to experiment for yourself.....