What happens when the most famous open source virtualization project (Xen) meets the most famous open source liveCD project (Knoppix)? Xenoppix.
Xenoppix is a new Knoppix 4.0 customization including the Xen package and 2 pre-made guest OSes: NetBSD and Plan9.
X window System is prepared by KNOPPIX and GUI of GuestOS is mapped to the X11 using VNC full-screen mode
You really need to read the website for requirements and further explainations but if you never tried Xen this is a very good way to start in about 5 minutes.