Good posting, a couple of points.
1. Live CDs. Your able to store things on Live CDs because they create a virtual file system file on the local drive. and merge that local file system with the filesystem that's on the CD.
what do u mean by "store"? by being in a virtual state isn't the virtual file system just temporary until u logoff live cd
unless u decide to save the wallet?
Yes, the virtual filesystem is temporary, so if you are using a Live CD and you create a wallet on it, and transfer money into your wallet. You have the option of saving it (where it ends up on your hard drive) or it disappears when you eject the CD and you lose the money.
which then means it can be stolen despite not being logged on with live cd?
That's correct