Simple version: what filesystem (or more complex setup, perhaps) is best for use on a liveusb system? LiveUSB system with filesystem directly on the drive, not one with compressed system image a-la livecd.
(The Choice of filesystem for GNU/Linux on an SD card question is somewhat relevant, but not completely)
Generally, it seems ext2 is somewhat problematic with regards to data-loss (i.e. sudden power failures / disconnects / etc.), and journaling filesystems (ext3, ext4) are relatively slow (i.e. terribly slow on some $8 thumb drive). Caching (
eprd?) seems like a possible option, although likely too problematic and not very useful.