Puppy Linux is a completely independent distro and is actively updated and changed, and has a large user base--it is a LiveCD distro and is, like Knoppix, intended to run as a LiveCD or from a USB thumb drive. The difference comes in the fact that Puppy Linux is loaded into the RAM, allowing the physical disc to the be removed, whether a CD or USB drive.
It comes with a suite of apps that allow you to do all the basics: chat, Internet, email, photo editing, VoIP, etc. It is available in different 'puplets' which are versions of Puppy Linux that offer different feels/interfaces. A good example is Vesta Puppy, which is a joy to use.