This may sound silly, but an external device could probably convert interfaces from USB to CD. So will I be able to install OS from USB if I buy a card reader?

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which OS are you talking about? – Sathya Nov 26 '11 at 11:30
@Sathya♦ , I'd like to install the latest ubuntu – Fluffy Nov 26 '11 at 16:11
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It really depends on the system and the chip used inside the card reader.

The BIOS has to support the device as a bootable device, and, many just support a very limited number of devices.

If you put it in and it is available as a bootable device option, and you then format the device with an active partition and include the setup files - most likely you will be able to.

That being said, you are much better off just buying a USB stick and installing to that as most BIOSes support Mass Storage booting.

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Sadly, my BIOS doesn't let me select USB – Fluffy Nov 26 '11 at 16:12
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Install? Depends on the OS. It is possible to select the installation medium source for some of them. Boot? Much harder. Completely dependent on the BIOS.

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