I want to run an application dealing with sensitive information (bank account data) on a not entirely trustworthy computer.
My idea now was to create a Live Windows on a USB drive with just this one application installed. The Windows installation itself can (and maybe should) be read-only, but some data needs to be saved on either this USB drive or a second one. Access to the internet is also required, but it would be nice if I could restrict it to a certain address.
I would prefer a Windows 7 version, just because of the better driver support.
What would also be nice is encryption of the USB drive (e.g. using Truecrypt).
I've never used a Windows Live CD, so is it possible to do all that? What is the easiest way to create a Live Windows on a USB drive and to preinstall my application?