Unfortunately it does not work on Ubuntu 12.04 LTS (live-boot 3.0~a24)
Here is the error message:
only one RO file system supported with exposedroot
I have not manually enabled "exposedroot". The error message comes from /usr/share/initramfs-tools/scripts/live:
if [ ${rofscount} -ne 1 ]
then
panic "only one RO file system supported with exposedroot: ${rofslist}"
fi
If I disable that statement, I get the following error message:
mount aufs on /root/ failed with option -o noatime,noxino,dirs=/cow/=rw://file2.squashfs //file1.squashfs/=rr+wh