Booting the RailsLiveCD from the CD was problematic. Changed the BIOS setting to boot from CD, still no luck. Fortunately it is even better with VMWare player. It is free. This method also allows you to run both windows and Linux at the same time.
1. Download and install the free VMware player.
2. Download and install the generic virtual machine.
3. Rename the RailsLiveCD iso file to livecd.iso. Move this file to the same directory as the generic virtual machine.
4. Open the vmx file in the VMware player and enjoy.
This blog is more descriptive.
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