Short bio: Computer Scientist, FOSS supporter (read more)
Tux Machines (TM)-specific
Most of the "Desktop" Linux liveCD distributions (distros) are meant to to be used for trying out or demoing Linux before installing them to your hard drive. Popular distros like Ubuntu, Mepis, and PCLinuxOS are good examples and in my mind are some of the best offerings. I've been there and done that. These are great distros, and there are many more! If you're looking for a Linux distribution to install on your hard drive, these are all great distros, and you won't be disappointed. Test drive the liveCD, install to your hard disk, and enjoy.
However, many liveCD distros can be used as a day to day desktop without ever installing them to your hard drive. Huh? Wait a minute, everyone installs the OS to a hard disk! Well yes, that's the way it has always been done, but I am not sure why we should continue in that direction... "ah, but I was so much older then, I'm younger than that now" (Robert Allen Zimmerman).
Why would anyone want to use a Linux liveCD as a basic day to day desktop? Here are some thoughts:
Using a liveCD as your Linux Desktop.