bootingUSB HOWTO

"This document explains how to create a Linux bootable USB disk step by step. The target USB disk will contain the GRUB boot loader, the boot file system and the root file system. In another word, it will contain the whole Linux operating system. In case your BIOS does not support booting from USB, the USB disk created using this HOW-TO can still work together with the boot floppy. In that case the only difference is that the GRUB boot loader resides on the floppy rather than on the USB."

http://www.freewebs.com/tsj/bootingUSB_ldp_v0.1.htm