I wonder if it's possible to use colinux to run any livecd distribution of linux. There is no problem if I have to remasterize the CD. Currently I am running mcnlive (mandriva) natively from a Live CD and also I can from my HD in "livemode", and this is the description of what I can configure:
initrd.gz - the initial ram disk, it contains a squashfs image of a basic linux shell. I can convert it to another fs if needed.
image.sqfs - the linux image, it is also a squashfs image. It's loaded from initrd and contains KDE and other applications. Initrd knows how to deal with sqfs, so I don't think I have to convert it.
menu.lst - mcnlive can use either isolinux or grub (parameters can be different depending on the booter)
So I wonder how should I set up my colinux.xml file if my mcnlive files are in my second partition of my first hd (windows g:\mcnlive\ = linux /dev/sda2/mcnlive/).
It should be doable.
I was running Knoppix some years ago. For this I was using cloop (comreessed loop). Somethere in the wiki will find the instructions. But it can be totaly out of date...
To running a live CD, you need to edit your initrd.gz, to load the modules for your CDROM.
Currently we have no squashfs module in default build. There was an old testing build (20070405). But don't exist any more. I'm plan to add it again. Would be nice if you can test it.
With squashfs specifics I can't help. I sugegst: Configure any of partition or image as /dev/hda1 or /dev/hdc as CDROM or as CD-image. Than use the squashfs typicaly parameter for the module.