anyway, a more recent distribution could resolve a bunch of other problems as well.

I use live cds quite often. some you may want to look at are ubcd4win (ultimate boot disk for windows)which is also the only one I have been able to get to work from bootable usb memorystick without issues. also there is Knoppix. searching the net for anything related to bartpve will help too (bartpve is used to build live cds might work with other distros of your choosing)