Starting out simple, I remastered without X being started (3.3-11-19-03).
Then made a change in init.d (to the booted CD) and then saved the change with 'saveconfig' to an ext2 formatted floppy.
Then rebooted the CD with additional boot argument of 'floppyconfig'.
Resulting (at the restore point) in a fast scrolling screen of:

"/some/next/filename - attempt to chown read-only file"

At which point I hit the power button...to get a chance to think.

The knoppix.sh on the floppy ends with the command "chown -R root.root /"

This seems rather strange. Since reseting the config is being done by root; and the default for tar extraction would be --same-owner; shouldn't it all be good? Wouldn't that (the chown -R) make all the users files in /home/whatever belong to root as well?

BillS