There are tools in Fedora repository for building live CD's. 'livecd-tools' is nice tool for generating live CD's on Fedora based systems including derived distributions such as RHEL, CentOS and others.
So first install this utility by issuing the command on terminal as root:
#yum install livecd-tools
After you install that utility, you'll see some kickstart files in /usr/share/livecd-tools dir. For my experiment I tried using one of the kickstart files from here. I choose the minimal kickstart file first. To create a ISO image of this file, issue the command 'livecd-creator --config=/usr/share/livecd-tools/livecd-fedora-minimal.ks'. Now you should have the ISO image for your kickstart file. You can test your live CD using QEUM. For that first install qeum (yum install kvm qeum -y).
Than issue the command #qeum-kvm -m 512 -cdrom YourFileName.iso.
I was not able to successfully create my live CD, I got some missing module error. Next I am gonna use some other kickstart file and try to create live CD based on it.