Debian Live is now at a stage where it is usable and working live CDs can be built. I have built several discs so far and tomorrow I will start distributing them...
I've written some HOWTOs for making new 'flags' for make-live, currently a shell script with the package names hard-coded, on the wiki (http://live.debian.net/wiki). I'm guessing Daniel and Marco are already working on the configuration files and stuff like that (there is a planned program split soon).
As I'm typing I'm building a custom Live CD for a friend of mine who wants to try GNU/Linux for the first time (other than when he came around to my place), which includes KDE 3.5.1, OpenOffice.org, KOffice, Firefox, Thunderbird and a few games. Still only around 500-550MB.
When make-live becomes configurable I'll probably start a site where 'profiles' can be uploaded.
BTW, if you're using apt-proxy or apt-cacher and don't know why your live CD build is failing after debootstrap, make sure that you're using 127.0.0.1 and not localhost, because apt-get executes in a chrooted environment where it cannot read your /etc/hosts file.