The 'livecd/bootargs' option is ignored because of an incorrect "non-empty" test in support/functions.sh; the attached patch fixes the issue.
Created attachment 75216 [details, diff] patch to handle 'livecd/bootargs' properly
I've made this change in CVS and it'll show up in catalyst 2.0_rc10
_rc10 (and _rc11) are InCVS...