Note that there are already Live DVDs and at least one (Games Spin) that is
limited by the 4 GiB iso size so as to be downloadable on FAT systems.
Many people who have a choice prefer USB2.0 flash memory storage over DVD
because it has much lower latency (seeks are much faster) and does not
degrade the drive [wear] nor the platter [scratches] during frequent or
intensive use. The downside is lower capacity in readily-available units
("4GB" [or even "2GB"] instead of "4.7GB"), higher initial cost for media
(typical in US: 4GB flash $9; DVD+R $0.40), different physical attachment,
different BIOS capability.
There is also a good chance that Squashfs will support lzma compression
by F13, which should be a noticeable help to spins up against their iso
size limits.
Squashfs and lzma have been living together happily for years:
http://www.squashfs-lzma.org/ Are you sure that squashfs in Fedora Project
is not using lzma?
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