Dont know why thats happening but this should will fix it.
Presumoing you have installed it on the HDD
Boot to RL2 (knoppix 2)
then XFREE86 -configure
(might be --configure)
this will generate a file in the directory where you are, presumably root and you follow the instructions. If this works then go back to the CLI and copy this file to /etc/X11/XF86Config-4