I was surprised to see that you were the first one to mention Virtual Machines in these comments.
I would use a VM on a "live" system, booted from removable media, to which no data is ever written. (DVD)
But it wouldn't be any Linux distro.
BSD is what I prefer. Take your pick of the available options, NetBSD, OpenBSD, FreeBSD, *BSD.
Qubes OS is a new xen based OS that takes security by isolation to a new level. Still young but I'm keeping my eye on it.
The article just convinces me of the need for highly tested/developed security focused distros. There are so many ways to screw up.