Well, I think when you boot from the CD, the bootloader (NOT Linux) loads an initrd image into memory which the kernel uses as the root filesystem. Whatever install programs that are on there, probably are inside the image and are run (by the kernel) from memory, not from CD.
When the kernel is accessing the CD drive (eg. copying packages) it has problems....
I think this is what you are asking...not real sure...
HTH
