I recently set up a usb drive with a bootable version of Ubuntu using the following tutorial http://www.debuntu.org/how-to-install-ubuntu-linux-on-usb-bar
It is geared to Ubuntu Gutsy but I was able to install the Ubuntu Hardy Alpha 4 with the same instructions.
Upgrade to Hardy Alpha 5, and Beta was really smooth, all I had to do was copy the new files into the bootable partition.