Hi byghtn3 I got the general idea, you want to minimize the risk even further by booting your host OS from a Live DVD and also using a CD/DVD for your VM images, a quite complex task. The firts problem for this will be the obvious memory load, since most Live DVD's use to put all the load in RAM (Host OS), the second problem resides in the VM apps, all of them seem to need temp space to save changes while the VM is running, and third and probably most important "problem",building a live Windows DVD (XP, Vista or 7) needs a LOT!! of tweaking, Linux will need tweaking too, but it's in the nature of that OS to be very modular, in my opinion this one will be a better choice for the Live DVD host OS. There are a lot of projects to boot Windows from CD/USB/Memory Cards, my personal favorites involve using WinBuilder, the boot-land.net site contains quite a few projects, however, be warned!, not all of them are at a mature stage, as sebus mentioned VistaPe, Live XP, etc, are among them. Some of these projects already involve the integration of VM apps, the most common ones being Vmware and Virtual PC, so integrating the vm plattform on the live dvd might be a little easier, you will have to do a little research to find all the scripts avaliable regarding VMs. The problem here radicates in the idea of using a non writable Virtual machine image (since it will be stored on CD), as mentioned before, the VM app needs temporal space to work and also needs to be configured to avoid commiting changes, I don't even know if there would be a problem derived from not being able to write at the main image, assuming it's possible the first obvious solution being the use of some swap/temp space at the computer's hard disk, as an option for the kind of config you seek, you could use a virtual ramdisk (a huge one), but again you will need to do a lot of tweaking to acomplish that goal, and assuming it works also need a lot of ram on your machine. About virtual machine images, you could simply configure a "base" one, then clone the image as needed, and configure according to your needs, one for general web surfing, one for online banking, one for programs testing, etc. One comment, as far as I can tell, you can't use burning software inside VM's, I might be wrong, but last time I checked Virtual PC's, VirtualBox and Vmware help, that operation wasn't allowed, so CD/DVD authoring might be out of the question. Also it's possible to have several email programs accessing a single account, if the server and the client support the IMAP protocol, since all the mail is stored at the server all changes will reflect on all clients, if accessing via POP you need to configure your email client to leave a copy of the message on the server, but the server must support that option and you could end wasting a lot of physical space (on the server), you should delete manually every message already downloaded and even could end up with several instances of a single mail on your clients. One last note, not directly related regarding Antivirus products, in my experience you must do a cold boot (from a LiveCD or USB, 100% virus free of course) if you want to have a high grade of success in detecting/removing viruses/spyware/malware, if you use any antivirus running within an infected machine, you will never be sure if the scan is reliable, since most of the malware runs at startup or even worst runs as a "failsafe" driver, you can bet that the infection is already present into memory, and some very nasty programs use advanced stealth techniques. The old technique involved booting from a DOS virus free disquette, containing the antivirus software and scanning the machine, since most new antivirus programs don't even know what DOS is, and with virus databases being at least 30MB in size, now we need to use WinPE based bootdisk and Win32's api aware antivirus programs, the easiest one to use (and pretty good btw) is McAfee Command Line, of course old advice apply, build your LiveCD/Bootable USB on a virus free workstation. You could also use Linux based antivirus like Avira Rescue Disk or Dr Web Rescue Disk, both downloadable from the web. If you are able to get that kind of config working, I really would like to know how it was done, please share the knowledge.
Don't forget that for Workstation one is supposed to pay (as it is commercial product) Vbox is nicely free sebus