windows in usb disk

http://www.tomshardware.com/howto/20050909/index.html

All it takes is a minor error in the Windows Registry or a virus infection, and your operating system can become unbootable. But with a properly configured USB flash drive on hand, you'll always have a compatible replacement no further away than your pocket or keychain. In addition, the flash drive can also provide a secure browser and virus scanner, and lets you take your favorite DVD burning and Office software with you wherever you may go.

All that's needed is a bootable USB Flash drive with at least 256 MB of storage capacity and a Windows Setup CD. Using the program Bart PE Builder (Freeware), you can install Windows XP on the flash drive, along with other software as needed (and as available space permits).

Compact

Bart Lagerweij's free utility, PE Builder, condenses the original setup data for Windows XP into a slender operating system that is ready to run from a CD or a USB flash drive. This compact, portable version of Windows includes all the important system tools for dealing with a PC emergency. You can even add other programs to this collection, such as the media writing tool Nero Burning ROM or an anti-spyware package such as Ad-Aware SE Personal, during the installation process.