"Am I right is saying that the livecd-creator and the existing .ks files create a livecd by downloading the packages from the repositories?" Yes.
"If so is it possible to edit one so it will use my installed system?" Yes , that is if you mean that by
installing the same packages as you presently have. You can list other repos to draw from such as
If you have a fast internet connection it will not take long to create your own spin. When you run
livecd-creator it will throw an error and not complete if there are any discrepancies such as
dependency resolution problems. You can then usually comment out the offending package in
the .ks file and rerun livecd-creator to complete the creation.
I recently used the "fedora-livecd-design-suite.ks" and the "fedora-live-mini.ks" to create my own custom design spin.
I added the extra "fusion" repos to the list in the "mini.ks" then added the extra packages I wanted included to the "design.ks"
I did copy the spin-kickstarts to my home directory and edited the .ks file leaving the orig ones in /usr/share spin-kickstarts intact. The opened a terminal as "su" and run:
livecd-creator --config=/home/phil/spin-kickstarts/fedora-livecd-design-suite.ks --fslabel=F14DesignXtra
You can leave of the "--fslabel=F14DesignXtra" as that was something I added to ID my build.
Don't know if this answered your question about duplicating from an "installed system" but I'v had good luck
creating live.iso's and installing them to usb flash devices and then using them to install to hdd.