As of today, the KANOTIX distribution  is...not dead, exactly, but most definitely without a firm direction. Its co-developer has left, its Paypal donation link is down, and it's not clear what's going to happen with it in the future.
KANOTIX is a Debian unstable-based distribution from Germany, distributed on a live CD. Its kernel comes highly customized to provide support for lots of hardware. It comes with a graphical installer and many customized scripts for ease of configuration. It was originally based on Knoppix, but it was always meant to be installed, while Knoppix is more of a live-CD-only distro.
KANOTIX's user base is mainly German, although there is an active English-speaking user base.
The official message  from KANOTIX's founder, Jörg Schirottke (a.k.a. "Kano"), reads, in part:
"Since financing Kanotix through donations has proved a failure and I am planning restructuring to a more stable base (be it Ubuntu or Debian will have to show in tests) and I myself regard Debian/Sid as unfortunately not compliant with a more commercial orientation, he (co-developer Stefan Lippers-Hollmann) has left the project."
The co-founder's reasons for leaving :
Why do I resign after two years of hard work for Kanotix?
As expected this isn't easy to answer and has evolved over time, but technical
and personal disagreements make this step inevitable and non revocable for me.
In particular I object about:
- almost one year without any form of suitable release:
- this is an eternity for an debian sid based distribution, clean upgrading from the latest release to current -sid is no longer possible
- no significant technical progress in those >11 months from upper leading personnel, planned milestones slipped, finished code improvements were neither incorporated nor even tested
- seriously deteriorating inter project communications and working athmosphere
- unequal distribution of workload and/ or responsibilities
- a siginificant shift of agenda in ways I can- and will not endorse
There is one thing about KANOTIX that will sorely be missed. By way of explanation, when you use Debian Sid and upgrade its packages frequently, things often break. Installation scripts are sometimes buggy. Things get moved around (for example, the shift from X.org 6.9 to 7.0 entailed a shift to new X directories). Packages don't work.
Beyond its great user community, KANOTIX included people who would watch out for the "dist-upgrade" bugs, find fixes for them, and communicate that information to the user community in a timely manner. (If you wonder why Ubuntu became so popular so fast, probably the main reason is that it tries to actively make things easier for end-users. Debian, upon which Ubuntu is based, has the opposite reputation.)
A few of my opinions about this situation:
- I don't expect professional developers to be great at communication. Especially when it's bad news. However, it would be nice if the KANOTIX team could be more forthcoming with its users about what's going on.
- I hope Kano doesn't decide to base future versions of KANOTIX on Ubuntu. My personal opinion of Ubuntu is that it takes away a lot more from Debian than it gives back.
- It's been a wonderful experience using KANOTIX these past 2 1/2 years. It's taught me a lot about Debian and Linux. My deep respect and gratitude goes to all those involved in its development. (And I think Kano's a genius.)
Note: The opinions expressed here are mine. I alone am responsible for them.