A live cd is a distribution, typically Linux, that will boot from your CD drive and run the OS, without impacting your hard drive or native OS. For a list of live cd's, check out the following sites:

http://distrowatch.com/
http://www.frozentech.com/content/livecd.php

There is quite a variety, some of the popular distributions are Ubuntu, Debian, SUSE, etc. I'm using a lightweight version of Ubuntu to do this now, on an older, 400 mhz laptop.

Hope this helps!

~ Carl