VMWare 5 has run everything I've thrown at it. Win98, WinXP and over a dozen Linux distros. The suspend feature of VMWare is nice, rather like the sleep function of a laptop. The only real reason I can see for this (apart from being a good way to sell lots of USB drives at outrageous prices
) is hat using VMWare also gives you a mobile Windows platform.
I would guess they have set it up so that Knoppix runs VMWare automatically, and resumes the last session in fullscreen mode, so you never see the underlying OS. This is how the Amiga Forever CDs work, running a cut down Knoppix, which you never see, that launches USE i fullscreen mode.
"Insanity: doing the same thing over and over again and expecting different results." (Albert Einstein)