Like the live cd, your "wallet" is NOT on the disk (in this case image). Any traces of it are disposed of when reverting to a snapshot. Unlike the live cd, you only have to install the bitcoin software once. If you really know your stuff, install the software and create your own live-cd with it.
Ah, so basically an alternative to the live CD. Though I would assume that a useful live *would* have the software installed.
It is a trust issue. If you know a source for a live CD with the Bitcoin software already installed that can be trusted to NOT have put in other stuff...
noids come in pairs you know.