Ran into a similar problem after I installed the nVidia drivers.
Stuck with no video option but 800x600

This seemed work for me running KNOPPIX 5.1.1 DVD with a problematic nVidia Ge Force 3 Ti 200

First downloaded the appropriate driver from the nVidia site. The latest wouldn't work with my older card so
I dropped back to the next one in the archives (there's a link in the lefthand box.).

Opened Konsole and su to root.

Did an init 2 to exit the XServer. ( first mounted the drive hde5 where the driver file is located)

did cd /mnt/hde5

The correct syntax for the driver installation in my case was:
sh NVIDIA-Linux-x86-1.0-9631-pkg1.run

Navigated thru the onscreen questions and it ended up compiling and installing the module.
Process is more or less automated.

After this was done, did an init 5 to restart the XServer.

Went to K-MENU ->KNOPPIX-> Utilities-> Choose/Restart Desktop.
Chose to restart KDE

At this point I had the same problem described above.

800x600 was the only option available.

Ran across a post in Ubuntu Forums that was a fix for me.

Here goes... I did it slightly differently than the post described so will edit and mod accordingly
------------------------------------------------------------------------
Open Konsole and su to root.

1) Backup your configuration file

cp /etc/X11/xorg.conf /etc/X11/xorg.conf_backup

2) How to reconfigure Xorg
Notice that auto detection of devices works best if Xorg is not running. Therefore it's recommended to stop X before reconfiguring this will put you to text only mode / command line:

/etc/init.d/gdm stop (or kdm for KDE)

3) You can do the whole X configuration process by entering:

dpkg-reconfigure xserver-xorg

(Just follow the prompts... if it turns out wrong - just redo it!)

4)To start Gnome/KDE again:

/etc/init.d/gdm start (or kdm for KDE)

---------------------------------------------------------------------------

After this, I did the K-MENU ->KNOPPIX-> Utilities-> Choose/Restart Desktop.
Choose to restart KDE

I seem to have the NVDIA driver installed and running and I have quite a few resolution options
available.

Right now I am at 1024x768 16 bit resolution.

The whole process takes a lot less time than it did for me to type this in !!!


Hope this helps.