This script is found within the initial ramdisk.
The Linux kernel and initrd (initial ramdisk) are loaded by isolinux from the CD.
When you see
Welcome to the KNOPPIX live GNU/Linux on CD! Running Linux Kernel 2.6.19 Total Memory available 1034728kB, Memory free: 1023596kB Scanning for USB/Firewire devices... Done. Enabing DMA acceleration for: hda [VMware Virtual IDE Hard Drive] Enabing DMA acceleration for: hda [VMware Virtual IDE CDROM Drive] Accessing KNOPPIX CD at /dev/hdc... Found primary KNOPPIX compressed image at /cdrom/KNOPPIX/KNOPPIX. Creating /ramdisk (dynamic size=827780k) on shared memory...Done. Creating unified filesystem and symlinks on ramdisk... >> Read-only CD system successfully merged with read-write /ramdisk Done. Starting init process.
This is all output by linuxrc
next /etc/rcS.d/S00knoppix-autoconfig (which is a symlink to ../init.d/knoppix-autoconfig) executes This file is part of Knoppix-initscripts