I don't think this problem is happening anymore: I installed the Jaunty Beta to 
my Sandisk Cruzer 8GB, booted it, installed fglrx, and upon the reboot I only 
got a completely corrupted screen. That tells me my changes were persistent, 
albeit not completely the outcome I was looking for in this particular 
instance. I've already filed a separate bug report for the corruption.
I don't know if Intrepid still has the broken persistence support.

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[Intepid] Ubuntu Live USB creator creates liveUSB's that are limited in size
https://bugs.launchpad.net/bugs/284085
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