XS Community Edition/Features/Liveiso
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http://wiki.sugarlabs.org/go/XSCE#F23-XSCE-LIVE
The above noted error is resolved in the next release.
login as root, "xsceinst"
proceed through the guided prompts
edit option 3: plain_partitioning
lots of screenshots
Should you want to create another user please do not use "xsce-admin" as a new user, that one is already occupied.
Notes:
Please refrain from using liveinst during testing, tring to implement that functionality in the future, but if you're brave try "xsceinst" at the bootprompt.