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Our script to build the LiveCD is based off the Debian Live project. Initially we hoped to work off Ubuntu's scripts but all we could find were ways to alter and existing LiveCD, rather than generate one from scratch.
Essentially we do a cdebootstrap, install all the packages we need, create a squashfs, setup syslinux and make an ISO.
The actual build script is http://svn.gnewsense.svnhopper.net/filedetails.php?repname=gNewSense&path=%2Fbuilder%2Ftrunk%2Fgen-livecd