I think the CD version should not contain much software. Just a shell, an editor and a web browser, with LXDE as only desktop with the Knoppix customizations (Knoppix menu, compiz integration). This can serve as a base for customizations made by the user, be on an overlay partition or via remastering. Let's say you Mr, Knopper already produce this everytime you make a new Knoppix image, just pause the process before adding the whole software suite contained in the DVD version, and give us that barebones image.
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