"Kadischi is an application for Fedora-based Live CD generation. It takes Fedora repository as an input and outputs a livecd iso image. [...]
Kadischi is heavily based on readonly-root package from Stateless-linux project. Many design decisions are collective work of people from fedora-livecd list. There are also some ideas taken from linux4all project.
Basically, Kadischi uses anaconda to install the system in a temporary directory (specified in the configuration file) on user`s hard drive. It then executes the collection of scripts (stored in /usr/share/kadischi/post_install_scripts) in order to modify the system to run successfully in read-only environment (CD). After all modifications are done, Kadischi creates an initrd image, then compresses the system tree (actually, it creates a compressed copy, and then removes the original one), and finally creates iso image of the system."