General description for whonix live mode part 1:
===== What is live mode? =====
In live mode all changes to the filesystem (logs, downloaded files, ...) will be saved to volatile memory (RAM) i.e. if you restart the machine everything will be in the same state as before and e.g. previously generated/downloaded files will be gone.
===== Why use live mode? =====
Sometimes files generated during an user session might contain sensitive data. Also malware might be installed e.g. while browsing the web. Those files will be gone after a reboot if you use live mode.
===== How can I save files? =====
Most people also want to make persistent changes e.g. store files in a way that they survive a reboot.
In case you want to apply updates, install new software, change desktop settings ... you can just boot into persistent mode and make the changes there.
When you want to save downloaded files or maybe some document you created in live mode you can attach e.g. an USB drive/another virtual hard disk to the virtual machine or use a shared folder and save your files there. Your main operating system will still remain unchanged.
===== How is this different from other live CDs? =====
Live CDs are usually read-only squashfs images and can't be easily updated which is bad security wise and uncomfortable for general usage.
Since most live CDs don't work in pure read only mode there are some mechanisms to make them "writable".
For linux distributions overlayfs and device-mapper snapshots are commonly used. These use RAM in order to store filesystem changes but those will be gone after a reboot.
The approach described here allows you to use a switchable system i.e. use live and persistent mode on demand.
In that way you can easily apply updates and other persistent changes and still boot into live mode if you choose to do so.