i tried to install alsa 1.08 on knoppix 3.7(kernel 2.6.9) but this was the answer
checking for gcc... gcc
checking for C compiler default output... a.out
checking whether the C compiler works... yes
checking whether we are cross compiling... no
checking for suffix of executables...
checking for suffix of object files... o
checking whether we are using the GNU C compiler... yes
checking whether gcc accepts -g... yes
checking for gcc option to accept ANSI C... none needed
checking for ranlib... ranlib
checking for a BSD-compatible install... /usr/bin/install -c
checking how to run the C preprocessor... gcc -E
checking for egrep... grep -E
checking for ANSI C header files... yes
checking for an ANSI C-conforming const... yes
checking for inline... inline
checking whether time.h and sys/time.h may both be included... yes
checking whether gcc needs -traditional... no
checking for current directory... /home/waelali/alsa/alsa-driver-1.0.8
checking cross compile...
checking for directory with kernel source... /lib/modules/2.6.9/source
checking for directory with kernel build... /lib/modules/2.6.9/build
checking for kernel version... The file /lib/modules/2.6.9/source/include/linux/version.h does not exist.
Please, install the package with full kernel sources for your distribution
or use --with-kernel=dir option to specify another directory with kernel
sources (default is /lib/modules/2.6.9/source).

seeing this part of the logs, it seems to me some recquired files are not found, you might want to check if you've placed them somewhere else, or i(in case you don't have them) where you can get them.

do you have the kernel sources installed ?
if not, you'll have to get a package with the sources for the kernel you use.

egag