Hello,

On Fri, 22 Aug 2008, Arun Khan wrote:
> The system boots from the LiveUSB, grub loads with it's menu.  It boots 
> the kernel but then the system drops into an "initramfs" prompt with a 
> busybox prompt.

Note that the internal disk of the EEE Pc is also a USB disk so your
initramfs may be getting confused as to where the root file system
is.

I had this problem while booting a USB disk on the EEE Pc. Changing
the location of the root device to /dev/sd[bc]* fixed the problem for
me.

Kapil.
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