I got it also, but funky rat's fix worked.

I did notice that the "initiating Startup Sequence" is missing when booting 2.6 - not that it's a big deal or anything, but I thought that it might be diagnostic.

When I use the following cheat code, things go real slow (particularly mouse):
knoppix26 noscsi myconfig=scan home=/dev/hdb5/
not sure why. Seems to work OK without the persistent home flag.