See details in the reference manual. This options opens all tablespaces and InnoDB log files as read-only. A small test showed that you need to set some more options in the my.cnf to avoid any write access to @@datadir:
I was a bit surprised why I had to disable the event scheduler. But on the other hand, what use has a regularly running statement that cannot store any data? After all your database is read only ;-)
And together with the new fulltext indexes in InnoDB and maybe compressed table spaces you can now deploy catalogue applications or reference manuals on DVD.