- Open Disk Utility in /Applications/Utilities/
- Create a partition just over the size of the disc image.
- Select your hard drive in the left table view and click on the Restore tab on the right.
- In the Source field, drag in the image from the left table view or select it through the selection dialog; for the destination, drag in your partition from the left side.
- Press Restore.
- Reboot, holding down the Option (alt) key.
- Select your Live CD partition.
- Enjoy your Live CD!
If anyone knows how to do this on other OS's please leave it in the comments and it may be added here.