LiveCD Player Virtual Machine
Normally you'd have to be using VMware Workstation to pull this off... (And, yes, I know there are tools out there for creating VMs, but I figured this would just be easier.) But now with Player being free and all, it is something that you can have ZERO virtualization experience and get up and running LiveCDs on your PC - within a virtual machine - in no time flat. I'm assuming, though that you have VMware Player or Workstation installed. If you don't go here to get player.
1) First, download and unzip this file. Don't worry, this file is only about 4kb in size (and it is only that large because I included a 2gb drive since some LiveCDs were complaining about the lack of a hard drive).
2) Then download the LiveCD of your liking. For this example I downloaded the Knoppix version 4 LiveCD.
3) Once you have the LiveCD ISO file on your computer, copy or move it to the folder where you extracted the files in step 1. and rename the file "livecd.iso" I put a blank file there with that name as a placeholder. You'll need to delete it before renaming your real LiveCD ISO.
4) Now that the files are in place it should look something like this:
5) Now you should be able to open the vmx file with VMware player or workstation... Here's the splash screen of knoppix starting and then a screen-cap of the whole desktop after it booted:
Here's a list of LiveCDs: