I recently acquired a 256MB USB pendrive that I use for storing personal documents and work-related stuff. As a Linux fan who wanted to make the most of his new toy, I went looking for the simplest, smallest distro I could find that could boot from a pendrive.
Read it at Linux.com
My conclusion: DSL is a great little distro. I can hardly imagine spending a day now without my trustworthy DSL-powered pendrive. Pendrive-based distros beat live CDs because they let you quickly save your session preferences and data on the same medium as the operating system. I won't use live CDs anymore except on older systems that don't support booting from a USB device, or for trying new distributions.