This has just been announced on LKML:
http://marc.info/?l=linux-kernel&m=114105130801477&w=2

The author claims that this LiveCD has better hardware detection than Knoppix. An ISO download and a poor quality screencast are provided on the home page:
http://www.machboot.com/

I'm getting the sources right now to see how it is done. The author indicates that it uses tmpfs and lazyfs. I hope the license is GPL and sources are provided.