The OpenSolaris LiveCD contains hsfs filesystems that
are compressed with lofi compression, primary among
these are solaris.zlib which maps to /usr and solarismisc.zlib
which maps to /mnt/misc.
The /usr filesystem contains essential components to
allow for the LiveCD to boot into a desktop. As a result
the layout of this filesystem is carefully ordered such
that accesses are sequential as opposed to being completely
random. This careful ordering of contents allows for the
LiveCD to boot into a desktop in a reasonable amount of
time (~3 minutes on most systems).
Since hsfs is the only OpenSolaris filesystem that allows
files to be ordered a certain way via the specification of
'-sort' flag to mkisofs(8), it was the obvious choice for
the /usr filesystem. And, the primary reason why compressed
lofi is used for the LiveCD as opposed to, say, ZFS or dcfs(7FS).
More details can be found in Moinak's slides here.