A Live CD is a distribution (that contains as much software as possible) stored on a bootable CD-ROM that can be executed from it, without installation on a hard drive. Nothing is installed, and the system returns to its previous OS once you pop the Live CD out.
One can use a ready CD or burn an ISO image downloaded from the Internet.
Some Live CDs come with an installation utility launchable from a desktop icon that can optionally install the system on a hard drive or USB keydrive. Most Live CDs can access too the information on internal and/or external harddrives, diskettes and USB Flash memories (i.e. to store data home directory or to be used like rescue systems).
Generating Debian Live CDs
Projects and tools for creating a Debian Live CD from standard Debian packages:
Debian Live: Official Debian project taking care about the tools to build, run, and install live systems.
bootcd debian packages
LiveMove is the set comprised of a LiveCD and a bootfloppy or USB key, i.e. MandrakeMove was a MandrakeSoft product that included a Mandrake Linux LiveCD and a USB key that automatically stored bootloader and hardware configuration as well as personal data. The latest version of this product does away with the disk entirely, presumably due to the size of the latest USB keys.
List of Debian based Live CDs
Knoppix the mother of all Live CDs:
Aptosid is a live cd of balanced sid snapshots together with easy and fast installation options to your harddrive
Voyage Linux is a Live CD for x86 embedded system and serves as PXE-install server.
List of other Live CDs