I see that a similar question exists but it's with regards to Ubuntu 10.10. I currently have Ubuntu 11.10. Also, I am unsure as to whether or not the Live booting would have anything to do with this issue.
I have tried going to the "Power" dialog and setting the close lid action to "Do Nothing" (as oppose to "Suspend). I then close the dialog, close the lid and still Ubuntu goes into suspended mode.
Although it seemed unlikely being that it's a Live boot, just in case, I tried rebooting after making the setting change but it still was suspending when the lid was closed.