I agree on this one, esp because the more important software, like KDE, is put into testing very soon after release.
I have found that the 3.2 version of knoppix is alot more relable than the current 3.3.
I think this is because knoppix is based on the "unstable" debian branch and this is a push there to get packages into unstable alot faster and without much testing now. Wouldn't it be more sensible to base it on the "testing" branch as nowadays this is only a few weeks behind but has had a lot of the really big bugs removed.
Debian have said that they expect unstable to contain a lot more bugs and don't recommend it's use expect for development.
Ashmere
I agree on this one, esp because the more important software, like KDE, is put into testing very soon after release.
Knoppix is based on stable and features some unstable packages due to certain new feautres of these packages. Testing would probably be a good option. I based a remastered CD on the testing dsitribution.

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