This tutorial shows you how to get Ubuntu running from an USB stick.
Read it here
The basic idea is that the files that prevent persistence (the ability to save your data to the USB drive) from working can be replaced by their previous versions as present in Ubuntu 6.10 Edgy Eft. However, because files on the LiveCD are compressed so they can fit on one CD, replacing these files requires quite some effors. Luckily, Mike has done all the hard work for you and has created a new hybrid Edgy/Feisty image. To use it, your computer needs to be of the type Intel x86. Dont worry, if you dont know what this is, you probably use it. Furthermore, I recommend you use a USB drive of at least 2 GB, because the image is quite large.
For those with 1GB USB drives or who prefer Xubuntu (which would be me ;)) I plan on creating a Xubuntu image, but Im not quite sure if Im able to. If it works out, of course Ill post on this blog.