UNetbootin - Universal Netboot Installer

UNetbootin allows you to install various Linux / BSD distributions on a partition of a hard disk or flash drive. As well as creating boot images of Parted Magic, Super Grub Disk, Backtrack, NTPasswd, Smart Boot Manager (SBM), FreeDOS, and others.

download for windows

download for linux
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unetbootin.sourceforge.net
www.teamteabag.com/2008/08/13/howto-linux-from-usb-the-easy-way-with-unetbootin