Yes it is and you don't need to reboot unless you install a new kernel. Isn't linux great? I'm not too sure what will happen though if you change the file system. For example going from ext2 to ext3. You may also run into a few problems if the directory structure changes such as switching to a different distro.
Tom,
In another thread I'm working on getting Debian to boot / off of a software raid. One of the ways I came up with involves a live install. It would be Debian Woody onto itself, basically. Just wasn't sure if it could be done (or how, for that matter).
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