Need help on Linux LiveCD on USB

First of all, Merry Christmas guys, it's finally been a year.

So my old acer laptop decided to stop working and upon closer look I found out that the HDD is dead. So I am looking for Live CDs that can be used for this laptop, before it's going down the rubbish bin.

The main purpose of this laptop is to monitor 2x TP-Link IP Cameras (SC3130G and SC3171G). At the moment, it uses its built-in "Surveillance Software" that captures the MPEG4 stream from the camera directly. However, rtsp or mjpeg is also supported, and I clearly dont mind using those. So long I dont have to get out of the house to see who is outside.

Here is what I've done so far:

So the first thing I did: Get Ubuntu Live CD and put it into USB drive as per pendrivelinux instruction. Version 12 didn't work because there is no PAE support on Pentium M. Version 11 works but it's too slow. Version 10.10 work but app store seems to be broken as there's no LTS. Version 10.04 is the best so far.

Almost everything works! The built-in Wi-Fi works (Intel 2200BG), internal speaker and microphone, touchpad, even the hotkey combination.

Then I installed VLC hoping I could just play two rtsp from those cameras and done. Except, unlike VLC in Windows, there is no timeout settings and it will stop working after a while unless I stop and play it again. Not giving up, went to try mjpeg stream from firefox. Same luck, it will stop after a while.

So I search around and found zoneminder. Installed it, but couldn't got the camera working. Try middling with all settings and gave up. The next day, ubuntu wont boot from the usb saying it has I/O errors. Actually that happened quite a lot and I have to re-image the USB drive for quite some time now.

Jumped ship to fedora. VLC isn't even able to display rtsp stream. got some I/O errors despite using different USB drive. Read on the fedora web that due to the nature of persistence file it will eventually run out of space and unable to boot.

At this rate of difficulty, I think back of Windows. Tried Bart PE using a Windows XP installation CD (this laptop has a XP Home license on it) and then using PE to Drive application. No dice.

After a series of frustration, I found a solution: create a html file that displays both mjpg in desires width and height. so all I have to do now is just open it using firefox. voila. no more third-party applications, no more nonsense.

However, the problem is that sometimes I couldn't shut down ubuntu (usually says I/O error). some times I can. and the most problematic is: unable to boot because there are no space on mounting drive. I searched around and it seems this problem is here to stay, as the persistence file will get used up until eventually the USB stick ran out of it.

anyone have any suggestion? at the moment the laptop works okay but occasionally if it is turned off then I'll have a problem. thanks in advance