Okay, I did it! Sorry about the delay; I had to acquire a laptop with enough RAM (you'll need at least 512) and then got sidetracked with a couple of other projects, but returned to this last weekend.
Here is how you make a demo CD in Windows!
The normal text is from Brianteeman's original instructions.
The boldface text contains my modifications for Windows, plus some tips.
1. Create your mambo website on your development system.
2. Create a work directory on your local machine
3. Save the database
Export your mambo database as a MySQL dump. To do this, you could use a program such as mysqldump or PHPMyAdmin. Save the dump, following the scheme: name_of_the_database.sql
Note: If you do this using phpmyadmin, make sure to check the "Complete Inserts," "Extended Inserts" and "Backquotes" boxes. Also check "Structure and Data."
One way to do the next part -- making the tarball -- is to download Cygwin which opens a Linux window. Then you can use the following commands. You maybe able to make the tarball using a compression program like PicoZip, but I won't vouch for it because I didn't do it that way.
Also, please see the note in Step 5 before compressing.
eg mysqldump datenbank > database.sql
pack the MySQL dumps into a tarball mysql-dumps.tar.gz (Note the tarball must have this name)
tar czf mysql-dumps.tar.gz *.sql .
Now move the tarball to the work directory.
Note: You can do this in Windows; in fact, you can switch back and forth between Windows and Cygwin at will since Cygwin runs in a window.
4. Edit configuration.php
With your favourite text editor you should make the following changes
$mosConfig_host = 'localhost';
$mosConfig_user = 'root';
$mosConfig_password = '';
$mosConfig_absolute_path = '/var/www';
$mosConfig_live_site = 'http://localhost';
$mosConfig_cachepath = '/var/www/cache';
Also, turn off SEF -- if you have it turned on -- or all you'll be able to see is the front page (although you can still turn off SEF from the backend).
5. Save the website to a tarball
Pack all your documents into the tarball htdocs.tar.gz,(Note the tarball must have this name) i.e.:
tar czf htdocs.tar.gz /var/www/htdocs/*
Make sure you do not include any backup files or your original configuration.php
I didn't know how to gather up all the files in Linux so I put all the mambo folders and files in a folder of its own and then used the tar command on that. If you do this, you must remember to add that folder to the paths in your configuration file before you compress it. You will also have to go into your database file to edit any manual links -- the price of ignorance.
Now move the tarball to the work directory.
5. Download lamppix-mini-iso-1.1.iso
http://ibiblio.org/pub/linux/distributions/lamppix/ it is 150Mb in size.
6. create a new directory on your local machine called source
Don't bother. You can't do step 7 using Cygwin...
7. mount the .iso image of lamppix
mount -o loop lamppix-mini.iso source
For this step, I used UltraISO. You can get it here. Put the files into a new folder named "master" that you create in your Cygwin home directory -- see step 8.
8. create a new directory on your local machine called master
You did this in step 7.
9. Copy the contents of source to master
No need; it's already there.
cp -a source/* master/
10 Copy the tarballs from your work directory to the master/www directory
You can do this using Windows, if you want.
cp htdocs.tar.gz mysql-dumps.tar.gz master/www/
11. Create a new .iso image
You might be able to do this using UltraISO, but this command works fine so why bother?
mkisofs -V "LAMPPIX" -r -J -b isolinux/isolinux.bin -c isolinux/boot.cat -no-emul-boot -boot-load-size 4 -boot-info-table -o my-mambo-demo.iso master
This should be all on one line
12. You are now ready to burn the CD
I did this using Nero Express. You can burn the ISO file with any burner that will burn image files.
eg cdrecord -v -eject dev=0,0,0 my-mambo-demi.iso
13. Test.
And debug... 
reboot the PC and boot of the newly burnt CD and it should automaticaly start and load your mambo website.
14. Clean up
remove the master and work directories
unmount the lamppix iso (umount source)
You can skip this since you never mounted anything.
DONT forget to change the configuration.php file on your server back to its original settings
Re: Create your own Mambo Demo CD HOWTO 
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