I have just installed a live site onto a development domain. I changed the web/unsecure/base_url and web/secure/base_url fields in core_config_data
web/unsecure/base_url
web/secure/base_url
Check your config.xml -- it probably has the live site database config.
For Magento the path is /app/etc/config.xml but I'm not sure if that's the same in your version.