hi, 

Please remove "root (cd)" from the grub/menu.lst from grml-live:

$ diff -wU 1 boot/grub/menu.lst~ boot/grub/menu.lst
--- boot/grub/menu.lst~ 2008-09-28 12:29:14.000000000 -0400
+++ boot/grub/menu.lst  2008-10-11 13:58:39.000000000 -0400
@@ -7,3 +7,2 @@
 timeout 30
-root (cd)
 # color red/blue green/black

It will still work when booted from CD. Most importantly, it will still work
when copied onto HD or USB. 

thanks