Tin Hat is a Linux distribution derived from hardened Gentoo which aims to provide a very secure, stable and fast Desktop environment that lives purely in RAM.
Tin Hat boots from CD, or optionally a pen drive, but it is not a LiveCD. It does not mount any file system from CD via unionfs or otherwise. Rather, Tin Hat is a massive image (approx. 2.3GB) which loads into tmpfs upon booting.
One pays the prices of long boot times (5 minutes off CD, 2 minutes off pen drives), but the advantage afterwords is that there are no delays going back to the CD when starting applications.
Tin Hat aims towards the ideal of guaranteeing zero information loss should the attacker physically acquire the box – either the adversary is faced with no file system to even begin cracking, or if any non-ephemeral memory is found, the adversary should not be able to tell if he is looking at encrypted data or random noise. Of course, achieving this ideal is impossible, or at least highly improbable, but it is nonetheless something one can strive towards. Tin Hat is a baby step in that direction.