I think removing the CD to play a DVD will not be possible. It is like removing your hard drive and then trying to play a DVD. Maybe there is another Knoppix-related version that runs entirely in RAM that would allow DVD playing, but I am not sure.
I'm thinking of running an Epia based computer as a TV media station without a HD, only a CD with Knoppix. Does the Epia systems have all hardware identified properly in the standard Knoppix? 3.4?
For example: http://www.mycom.se/produkter/434226/
It mentions "Integrated VIA CastleRock AGP graphics with MPEG-2 decoder", will that be enough to play DVDs and XviD etc in Knoppix?
Or would I have to buy an actively cooled 1 GHz version "embedded VIA C3™ E-Series processor for more demanding digital multimedia applications"?
What about removing boot CD to play DVDs?
I think removing the CD to play a DVD will not be possible. It is like removing your hard drive and then trying to play a DVD. Maybe there is another Knoppix-related version that runs entirely in RAM that would allow DVD playing, but I am not sure.
I think http://freshmeat.net/projects/movix/ is exactly what you need; boots from cd, loads OS to ram (which allows you to remove the cd!), plays dvd, divx, etc..
Dunno whether the slower, say, below 700mhz via systems are capable of playing divx since they always tend to be somewhat slower than AMD/Intel anyways! but a gigahertz should do!
For pure playing, may be you can consider xbox.

Vintage Intel Mainframe Server MCM CPU Substrate Lot Prototyping PGA Validation
$500.00
HP 5060-8359 8K Semiconductor Memory Module 5080-9747 Vintage HP Computer
$224.72
HP 13210-60001 Disc Drive Interface PCB HP 7900A 7901A Vintage
$225.61
Vintage Telex 952003-112 Mechanical Terminal Keyboard IBM 3270 Mainframe DB25
$799.00
Vtg IBM Mainframe Prototype Chip Module Lot 146 pc 1988-1993 ES/9000 Lab Arcive
$649.00
Commodore 64 PC with Model 1541 Diskette Drive and Flight Simulator II *READ*
$199.99
Vintage Mainframe Computer Disk Drive Pack Dyson SMD 5 Level Disks
$79.00
Rare Vintage Mainframe Burroughs Discrete-Transistor Cordwood Module B2500/B5000
$99.95
Vintage UNIVAC 3620670-01 Mainframe Logic Board 15MHz Sperry Computer PCB
$98.95
IBM 3274-51C Controller 3270 mainframe 8" floppy tested to power on
$500.00