Our local LUG's (www.lancaster-linux.org/) leader played with Knoppix at the last meeting I was at (been busy). It was fairly impressive. Also, it wasn't completly nonpersistant. You could save your settings to a floppy with an easy point-and-click, and there was even a function to install to the harddrive. The compression they use is impressive, too -- according to the status screen you get when installing to the HD, you get over a gig of stuff on that CD -- all of it ready to use.

I didn't get a chance to look at the installed copy, but I suspect it's pretty much a standard Debian.