If you need only a few development tools from linux on a Windows machine for some light work, consider Cygwin. You can save some time and effort with this.
As for the original question:
Install Ubuntu as a bootable OS onto the thumb drive itself so I can boot directly into ubuntu on a machine.
Yes, this possible. You have two options:
- Creating a Live USB Stick (similar to a Live CD). Read this post for details.
- Create a persistent install that remembers changes that you make between reboots (unlike a live installation which gives you a clean slate every time you boot). Take a look at this article for details.
Note that both the posts were written for Ubuntu 9.10, so you many need to make a few tweaks/changes if you're using some other version.
Use the same Ubuntu installation inside of a VM on more powerful machines.
This is also possible. You can install Ubuntu on a VM on one of the machines and "export" the installed image for use on the 2nd machine (I know VirtualBox offers this functionality for sure, though its a little slow). This approach will work if you have only a few machines that need this VM environment.