Make changes to read-only file system using RAM

[Chris Swanson <chrisjswanson@gmail.com>]

Hi,

    Has anyone seen any work done on a RAM based file system that
stores only changes to what would otherwise have been a read-only file
system?  For example, live Linux CD's rely on RAM file systems to
store directories/files that must be modified, but the majority of the
system is mounted read-only on the CD.  I was thinking it would be
really nice if we could mount a read-only medium (like a CD) in
read-write mode, and store only modifications in RAM.  This could give
the illusion of a true read-write medium, and the RAM file system
would just grow as more changes are made.
    I have searched around a bit and found nothing like this. 
Unfortunately, I have no kernel programming experience (although I'd
love to learn).  I was wondering if anyone has tried something similar
in the past.  Also, if anyone with more experience can see any reason
why this is impossible or impractical, I would love to hear it, before
I come to the same conclusion many months down the line.

Thanks for your time,
Chris