Being able to boot from a flash drive is quite handy at times (for example if you need to rescue some files from a dead computer). Recently I tried a utility designed to make a bootable flash drive. This utility lets you install any of several different Linux versions on a flash drive quite easily. The software, unetbootin, is really easy to use. I’ve got Ubuntu running from my flash drive now (DSL is another favorite of mine).
UPDATE: The software package YUMI is a great alternative to unetbootin, and allows you to boot from multiple OS on the safe flashdrive.
UPDATE: The above method is great, but anything you do while running those OS will be lost. I’ve read an article recently (I believe on LifeHacker) that suggested creating a VM on the flashdrive using a free hypervisor. That way, anything you do should be maintained. I’ve not tried that yet. See this http://www.pendrivelinux.com/using-a-portable-virtualbox-to-run-linux-from-usb/