Good Question! I have asked it before and here's what I believe the terminology "Live" PTO means.
"Live" means that there exists a method to start, operate and stop the PTO regardless of what gear the transmission is in, and regardless of whether the tractor is moving or not. On Ford tractors with "Live" PTO, this is accomplished by the 2 stage clutch mentioned in the other posts. This is simply a separate clutch for the PTO that just happens to be operated by the transmission clutch petal. This simply eliminates having 2 clutch petals.
"Independent" PTO means that the PTO is isolated from the transmission. On the "Non-Live" PTO models, such as the 8N and 641, the PTO is operated from the transmission. If you are brush-hogging and push in the clutch, the tractor will still move forward until the brush-hog's centrifrugal force stops turning the PTO shaft. Many folks have ran through fences because of this, but it is easily fixed with a overrunning coupler, which allows the implement to spin freely without turning the PTO shaft. This type is "Non-Live" beacuse when the clutch is depressed and disengaged, the PTO stops being driven at the same time.
To check yours, first press the clutch petal down with your hand with the tractor shut off. You should "feel" the PTO clutch disengage about 1/2 way down. Then crank her up and, while sitting in the seat and with no implement attached, engage the PTO with the clutch depressed. Put her in gear and let the clutch up slowly and see if the PTO shaft begins to turn before the tractor moves forward. This will be very obvious if you have a 2 stage.
And as always, the serial # on the flat spot above the starter will tell you for sure as well.
Sorry so long-winded and Good Luck!