I would think you could just set up a runtime on the CD, and it would work just like any other external runtime. You might find this tutorial useful:

http://forum.daz3d.com/viewtopic.php?t=9060

However, I think you'll find CDs are pretty small compared to your average runtime. You'd probably be better off buying another hard drive. Get an external hard drive that hooks up to your USB or Firewire port, and installation is easy. Prices are lower than ever.