You can boot Linux from anything that your BIOS supports. The talk
about Live CDs booting from CD is just a specific sub-set of Linux that
does not even require you to have a hard drive. These Live CDs are
useful to demonstrate Linux, or to test Linux, or to recover data from a
non-bootable Windows system. They aren't really typical of an
installed Linux system (though many of them *are* isntallable to the
hard drive).
Mark
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