I think 2008.05 installs and boots fine from a USB memory stick. Why not just 
install 2008.05 build 86 on a USB stick instead of 2008.11?

I use 2008.05 build 86 for all my work and there aren't really any problems 
with it after you fix that one IPS bug that everyone was dealing with then 
build 86 first came out.
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