Microsoft denies that booting Windows off a USB drive works.

"After completing this tutorial, your Windows XP install should directly boot off your USB-drive, and be fully upgradable, DirectX games will run, all apps i tested work like normal, speed is the same as with a real HDD (you need USB2 though) - so it is in fact a fine solution as far as i can see."

ngine.de

Step-by-step illustrated guide on how to boot XP from an ordinary USB drive, with help from Microsoft and the justly famous BartPE.

Microsoft released new software that can manage the USB handover much more smoothly. The new software is part of Service Pack 1 for Windows Server 2003, but can work fine in booting XP and even Win2K from USB. (We'll tell you how to get free copies of the new software in a moment.)

The second piece involved Bart Lagerweij and his justly famous "BartPE" software: The BartPE software is a free and powerful way to create custom bootable, self-contained XP CDs that are ready-to-run and that come with a full battery of software tools for PC diagnosis and repair. The BartPE XP CDs are like the "live" versions of Linux -- everything runs right from the CD.

http://www.desktoppipeline.com/177102794

Bonjour Chachazz

I have succeeded in installing and booting XP Pro SP2 on an Iomega USB external USB drive thanks to the site ngine.de

It works fine on my laptop (the one that I used to install to the USB drive), but I am not able to boot the drive on any other computers.

Having read through the forums on ngine.de, it seems that this is a known issue, but I am hoping that someone here might know of a "workaround" !

Thanks for any insights...
Regards
Krystyna (from PC Astuces and Zebulon)

It is a handy idea to install software in the USB drive.Though it is little bit slow than the hard drive but very useful when you are working in dofferent computers in which there may not be installed your software you need.
Visit here for more details:
http://www.softslas.com/install-software-in-usb-flash/594/

Hello tanmay from softslas.com. Welcome to GSF.

We aren't keen about bloggers and advertisers coming to drop links
..we provide free, non-profit service, all by volunteer helpers.

However, your site is nice and the articles are useful;
(there doesn't appear to be alot of ads or ad links)

It's bookmarked now

Thanks for the information I was always told that you couldn't boot from a USB drive, so I guess I was informed wrong :( could have made my life a lot easier the last few months thats for sure!!

WinToFlash
WinToFlash starts a wizard that will help pull over the contents of a windows installation CD or DVD and prep the USB drive to become a bootable replacement for the optical drive. It can alsow do this with your LiveCD.

You don't have to worry about scratches on the disc or misplacing your original media discs once you transfer their contents to the flash drive. The optical drive is quickly becoming a thing of the past, especially in office environments, as media is shifted to the cloud.

http://wintoflash.com/home/en/