n. 1. Data that is written to be interpreted and takes over program flow when triggered by some un-obvious operation, such as viewing it. One use of such hacks is to break security. For example, some smart terminals have commands that allow one to download strings to program keys; this can be used to write live data that, when listed to the terminal, infects it with a security-breaking virus that is triggered the next time a hapless user strikes that key. For another, there are some well-known bugs in vi that allow certain texts to send arbitrary commands back to the machine when they are simply viewed.
2. In C code, data that includes pointers to function hooks (executable code).
3. An object, such as a trampoline, that is constructed on the fly by a program and intended to be executed as code.
4. Actual real-world data, as opposed to 'test data'. For example, "I think I have the record deletion module finished."
"Have you tried it out on live data?"
It usually carries the connotation that live data is more fragile and must not be corrupted, else bad things will happen. So a possible alternate response to the above claim might be:
"Well, make sure it works perfectly before we throw live data at it."
The implication here is that record deletion is something pretty significant, and a haywire record-deletion module running amok on live data would cause great harm and probably require restoring from backups.