The Livebox SQSHFS Filesystem used on the later firmwares can be extracted from the SQSHFS images BUT requires root access as you will be creating dev nodes.
I used the mksquashfs from squashfs2.2 and the unsquashfs from squashfs3.2 (squashfs v2.2 does not include unsquashfs, squashfs3.2 will not build 2.x compatible images) and built them by just running the make with defaults. These appear to create Livebox compatible files.
The command to extract the files from the image is unsquashfs -i -d directory_to_extract_to sqshfs_image_to_extract_from. This will create a directory containing all the extracted files which you can then edit.
To create a new SQSHFS image I used mksquashfs directory_to_create_from sqshfs_image_to_create -be -all-root -no-fragments. This will create a new image containing all the files from the directory specified.
I have used the commands within RedBoot to copy the image to the Livebox and then flash over the existing SQSHFS Image, although you can do the flashing using the programs contained in the running firmware as long as you have command line access. Both methods are more difficult with the latest firmwares.