HOWTO build a Gentoo LiveCD from scratch

"This mini-HowTo will show you how simple it is to create your own LiveCD by hand. It will also allow you to have the following advantages over the catalyst way:

* The build source will be kept intact and will not get deleted between iterations of LiveCD creation. This will allow you to sync, update, merge, and customize your environment incrementally the same way you do it with a real system.

* The CD will boot using GRUB, not ISOLINUX (ISOLINUX is still possible). This gives you the same flexibility you have with a real system, that it, changing kernel parameters, discovering devices, etc.

* As a nice side effect of keeping your build source between iterations, the build time will be reduced dramatically."

http://gentoo-wiki.com/HOWTO_build_a_LiveCD_from_scratch