I'm following the guides at https://help.ubuntu.com/community/LiveCDCustomization and https://help.ubuntu.com/community/Installation/FromImageLoadedOnHardDrive in order to make a custom ubuntu cd to send to a family member. It appears to me that if i make a custom image that when i chose the Install option from the boot menu it will actually install that custom image with all of the packages that I chose and not the default ubuntu installation. But I wanted to make sure that is the case because if I cannot create an installable custom cd then its useless for what I want to do. Can anybody clarify this for me? Thank you.
When you customize a CD in this manner (creating usually a DVD sized image), it will be in essence an image of an installed system squashed into a compressed image.
When you install on a new system, all the programs you installed (and changes made to the underlying system) will be carried over.