PendriveLinux.com shows that Ubuntu can be run from a directory on a portable device or directly from an internal hard drive if you so choose
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One advantage to using Qemu hardware emulation as opposed to a native USB boot is that it allows you to plug your USB stick or portable hard drive into any available PC and run a complete operating system without restarting. The additional advantage of using Ubuntus persistent feature is that you can save your personal settings, files and changes back to the stick. Qemu and persistent Ubuntu make for a nice and simple combination. We have assembled a package that contains the necessary components to make it all work together.