How to create Linux LiveCD

There are two ways to do it, actually you can either go ahead and create a customized Linux LiveCD yourself from scratch. For that there is an artical on IBM's website - Artical

This actually a more geeky method, a bit complicated for newbies, on the other hand there is another option... an easy one

There are some nice guys out there who have hosted their custom built LiveCDs

You can just download their ISO image file and burn that on the CD or run it through VMware player

You can get hundreds of free IOS linux LiveCD images and tools here