A "LiveCD" is one that boots and runs an operating system entirely from the CD. It uses your computer's RAM memory and other hardware, but leaves the hard disk alone. This has become a very popular way of distributing dialects of Linux. It lets you try out the operating system to see if it works with your computer's hardware -- without committing your computer's hard drive to it.
The data that makes up a LiveCD is distributed as a single ISO file; you burn the ISO file to a CD. Software like UueBootIn-Windows.exe places the ISO file onto a USB drive (aka thumb drive, USB key, and so on), so that the USB drive can boot the computer with the operating system. The USB drive usually needs to be a 1GB model to hold all the data; 512MB models are too small in size.
To get the computer to boot from the CD or USB drive, you need to change the boot order of the computer. "Boot order" is the order in which the computer searches for the data it needs to start running the operating system. As the computer starts up, watch the screen carefully for which key to press to change boot order. It could be the Esc key, or F2, or F8.
Don't just press the key once, otherwise the computer might not notice. I find I have to press the key repeatedly. Change the boot order so that the first device is either the CD drive (for LiveCDs) or the USB drive (for LiveUSBs).
Sometimes you have to guess, particularly for USB drives. This is not a problem; if the computer cannot find boot info on one drive, it checks the next one in the list. If you picked the wrong drive, just restart the computer, and then choose another one.
LiveCDs are very popular for testing operating systems. For example, I recently downloaded v0.2 of Android for PCs, and put it on a bootable USB. I found that the new OS froze on the two different notebook computers I tried it on. So, I could reformat that USB drive, and use it for another OS to test.
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