I have had a fairly cool experience with the Ubuntu live CD for PPC on my iBook G4, which I think says a fair deal about how well the Ubuntu team are handling their tasks.
But the functionality problem remains. It's nice to be able to take a look at how Gnome and the Linux environment are progressing without too much hassle, but the specialised Linux live CDs (data recovery, system security, multimedia, etc.), are normally iXX6-only.
So, indeed, maybe we need a specific Apple product there.
On the other hand, it is not that hard to setup a favourite app to boot from a USB drive (the Carbon Emacs package does that particularly well), as long as one uses a Mac of course.
My dream: a bootable, stripped-down MacOSX I can boot on any Intel machine... Bliss...
Live CDs for the Mac