Sorry but I'd have to disagree with you, kansas. The very reasons most live CD's are switching to grub is because it is arguably more flexible than lilo/isolinux as a rescue CD boot manager. With grub, you can boot with the CD kernel and adjust its arguments similarly to what the OP discovered (use the "e" key).

But you can also point it to your HD install, and then boot from your real kernel, even if the CD has another version. Of course you need to exit the grub menu and learn how to use its CLI to achieve this, but it can be real handy. Actually, you can do from the command line whatever you can from menu.lst - even booting other OS's... GRand Unified Boot loader indeed!

The thing which worries me is live CDs moving away from floppy emulation, which causes CD's not to boot on some lsystems with a less capable BIOS.