Well, I make flash drives just like real drives. There are three basic ways to create them.
One is to simply use a tool like one might find at
www.pendrivelinux.com to copy some live media to a flash with a program.
Two is to use a program from pendrivelinux or use the live cd's for a tool that does the install from live media and add's persistence.
Three is to install to a flash drive just as if it were a real hard drive. I generally make a virtual machine to do that. One can use a real computer also. I'd then suggest you remove power to the internal hard drive. Be sure that power is off and that you boot to bios with the usb flash installed. Then when you see the drive shown in bios you can reboot to a live or installer cd/dvd and install what you want. This way makes a fully updateable usb that can boot on most systems.
You don't see it too much anymore but some usb drives need to be fixed with the hp tools. An 8g or larger flash would not need it I'd guess. The old 128M drives and such were odd. They might report as usb-zip or some odd deal.
