Well, the install worked, and I'm now typing this from an installed OS
running off a USB key (8GB USB 2.0)!
I've thought for a while that this would be handy, because if I can have my
own OS on a USB key I can carry around with me, I can set up my PC with a
generic guest OS that logs in without a password when turned on. Obviously I
can do that with a guest account on one OS and have a separate admin account.
But it's a pain having to logout and login as me every time I power on,
instead of just putting a USB key in a port, and going straight to a login
screen where I can login as me.
Also, if I have my own OS, the guest OS doesn't need to even know my user
files partition is there. Anyone using the guest login can see it's the only
account on the OS install, so the only to reason to think there's other
partitions on the internal disk is the guest OS partition being so small for
a whole drive (by modern standards). I could even divide my user files into 2
user file partitions, one for use with the guest OS, and a hidden, encrypted
one for my own private use (maybe using LVM so I can resize them as needed
without data loss?).
One other thing, putting my tinfoil hat on for a minute, is that I don't need
to worry as much about anyone getting access to my PC, and hiding some kind
of bug (keylogger / trojan / whatever) in my drive. Because I'm only ever
booting from my key, and mounting my user file partition as /home, it doesn't
matter if the guest OS on the internal disk is compromise.
Final thing, I've just always liked the idea of starting my computer my
putting a key in the ignition, in this case the ignition being a USB port ;)