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If I were to run a Linux LiveCD regardless of the underlying operating system I am running, am I subject to the same problems I can run into when using the installed operating system? What are the limitations of a LiveCD when security is paramount?

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No. Firstly viruses are often platform specific. Secondly, the livecd is running off ram, and the base system is read-only, with any changes either being ignored, or on a overlay file system.

The installed OS affects the livecd in no way at all.

If security is the main consideration, livecds are perfect - you can verify that they're not tampered with, and if you turn off the system all data are lost.

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What do you mean by on a overlay file system? Also what about what Keltari mentioned? – PeanutsMonkey Aug 22 '11 at 2:22
UnionFS is an example of a overlay filesystem. As for what Keltari mentioned, lets say you had a virus that was aware of your specific livecd, and could run on it (perhaps its written in java!) and managed to execute - then you'd have the virus affecting your current livecd session, change things on the internal storage (assuming it was mounted) and do the usual virusy things. However, outside hypothetical viruses, there's no practical virus that can do that. Most focus on windows since its the most common OS, though OS X viruses are popping up – Journeyman Geek Aug 22 '11 at 2:30
Thanks. What about hardware specific spyware/malware? – PeanutsMonkey Aug 22 '11 at 2:40
This could be a separate question but I don't follow what it means by It allows files and directories of separate file systems, known as branches, to be transparently overlaid, forming a single coherent file system. So if I have a LiveCD which would be the branch assuming Windows is installed on the harddrive? – PeanutsMonkey Aug 22 '11 at 2:43
no. The main file system is the read only FS on the livecd. the branches are the changes made in the local session. – Journeyman Geek Aug 22 '11 at 2:44
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No. The liveCD itself is safe from getting infected by viruses. No virus could get written to it.

However...

lets say the internal hard disk has a virus. You could access the internal hard drive and its infected data. Depending on the virus and how it operates, you could activate the virus. It could affect how your LiveCD OS operates in that particular session, as well is infecting more data on your internal storage and the internet.

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