I hate answering my own questions :-) but here is what I found out ...
the script livecd-creator from the live-tools, has too very appealing options which are suppressed when calling the script with -h flag.
I had to dig into the python code to find it ...
if you call the script with the option --shell, you will get a shell, so you could play and customize your cd - this is a chrooted shell..., before it is created...:
Therefore, to create a live-cd based on your system:
customize the following file:
add all your repositories, get a list of your packages from your system - don't forget vim and ssh. call the script like this:
LANG=C livecd-creator --config=centos-livecd-minimal.ks -f <YourCDNAME> --shell
this will give you a shell to play with:
edit all the files you want, if you have another server you can copy before hand all your configuration files, and then scp them from that server into your chroot.
when you finish type exit, this will pack your system into a livecd ...
if you are just testing and you want to save time, add the flag --skip-minimize for the above command.