How to Install Ubuntu Gutsy Gibbon onto a USB Flash Drive. Yes it’s very geeky, and yes it’s rather complex, but if you have the desire and the patience, this is the way to do it. Good luck.
this tutorial will enable you to automatically save your changes and settings back to the stick and further restore them on each boot using a second “casper-rw” persistent partition…Ubuntu 7.10 takes slightly longer to boot than previous releases. However, once it’s up and running, it performs much better than running from the Live CD.