You can try Puppy Linux, it's kind of nice.
Why live cd though? Some of the tiny linux distros will run in memory, but I guess this would require more RAM. Others that run directly from the CD (like I think Ubuntu does when run as a live cd), will be very slow as your cd player is a 100 times slower than your hardrive. Why not install a version of linux?
You might also want to try windowing environments such as Fluxbox, which is extremely lightweight (more so than XFCE).
As a side note, what do you plan to use the machine for. If it's as a file or web server, you might be better of installing no windowing environment and just use the command line. :)
Why live cd though? Some of the tiny linux distros will run in memory, but I guess this would require more RAM. Others that run directly from the CD (like I think Ubuntu does when run as a live cd), will be very slow as your cd player is a 100 times slower than your hardrive. Why not install a version of linux?
You might also want to try windowing environments such as Fluxbox, which is extremely lightweight (more so than XFCE).
As a side note, what do you plan to use the machine for. If it's as a file or web server, you might be better of installing no windowing environment and just use the command line. :)