There are several potential points of failure in installing in the method you are trying:
1) You could have not safely removed the USB drive (as in unmounted) before taking it out. Assuming you disconnected it of course.
2) The USB formatting utility did not do it properly the first time. Sometimes I need to use different utilities to do the same thing depending on the distribution.
3) The ISO you downloaded did not download properly.
4) Your uSB drive is damaged.
One common misconception is that some USB drives are incapable of booting any OS, be it an install source, or another. I have never seen this first hand and am highly dubious of such claims.
Booting from USB is both convenient and typically fast. If you have further issues you may just want to abandon it for now and revert to traditional optical media.