The useradd-command in targets/support/livecdfs-update.sh does not work, when one of the given groups (currently users,wheel,audio,games,cdrom,usb) does not exist. In my case, the group 'games' does not exist, so I see the warning 'useradd: unknown group games', but catalyst does not break and finalizes the (unusable) CD.
I've added a check to CVS to see if the games group exists and it will add it if it does not.
Fixed in 2.0_rc42