Note that "Safe Graphics Mode" would not work because of bug #59618.
And your swap file would not be used because of bug #62868.

That said, the issue, as you described it, doesn't seem to be related to video 
driver problems, nor to your scarce amount of RAM (*): none of these would make 
the LiveCD reboot so quickly.
It's more probable it's a kernel issue.

Try removing the "splash" and "quiet" parameters when booting your
LiveCD: maybe this way you'll see some error message.

-- 
edgy live cd fails to boot on old machine
https://launchpad.net/bugs/60940

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