Adding gpxe to a GRUB menu as an item may prove to be another great way to boot a rescue system. Note that I didn't try this yet (only booting installation media with b.k.org).
http://grml.org for example can create a pxe boot environment from the live system, just run grml-terminalserver and it will start a dhcp/nfs/tftp server and provide all necessary data.
P.S: I am involved with grml so take it with a grain of salt
By the way, thank you for your work on grml!
Use case: one USB drive with custom MBR, one text configuration file and one or more liveCD images. On boot-up, the user selects one of the images and loads that generic OS.
DOS (MS-DOS, FreeDOS, DR-DOS, ...), Windows 95/98/ME and boot loaders (Syslinux, grub, grub4dos, gujin, gag, mbldr, ...) boots, other operating systems must be aware of the memory mapping.
With SuperGrub2Disk http://www.supergrubdisk.org/wiki/SuperGRUB2Disk you just have to add a iso file into a specific folder and it will automatically be added to the bootloader menu. But AFAIK it does currently not support the memdisk solution.
Another solution is use debootstrap to install Debian or Ubuntu to a plain directory. Be aware that you have to make some adjustments to the system (like installing a bootloader/kernel/adjust fstab etc.) after executing debootstrap. You can also use grml-debootstrap which automatically executes the needed steps to make a system bootable.
/shameless plug
