A live CD is a normal, but bootable CD, which you can use to boot a new Operating system, without installing it in your computer.A live CD is also called LiveDistros.
Many Linux operating systems come in live CD’s. Many of these Operating systems are quite useful since they come packed with a lot of good utilities like word-processing, Powerful browsers. Hence through Live CD’s these operating systems can be booted without installing them in the hard-disk in the first place. This kind of booting does not affect the operating system present in the hard-disk. This feature helps in the easy use of live CD’s in any computer without installing it.
When the system Boots it normally processes the instructions in the BIOS [Binary input/output system].