I wanted to give everyone who has had issues with Knoppix and Dell Optiplex GX270 machines a heads up on what causes it. Yes, the 1MB/8MB video setting is part of the problem, but the bigger culprit is the *BIOS version*. The A01 and A02 BIOSes work just fine with all manners of Linux (including Knoppix) but the latest one, A03, seems to cause a misread of the amount of video memory regardless of the setting in the BIOS. My GX270 came with A03 installed and was exhibiting all the issues described in the various threads here. I downgraded to A02 and just now booted Knoppix with no cheat codes whatsoever to find I'm in at a decent res and working just fine. The A02 BIOS can be gotten here:

ftp://ftp.dell.com/bios/gx270a02.exe