The ubuntu ISO is a live system, you can install it on any USB drive of sufficient size.
To install it from a Windows system you can use
uSbuntu Live Creator.
The article LiveUsbPendrivePersistent explains how you do it from an
ubuntu system. There are GUI methodes, no need for command line hackery.
I personally use the following script to install ubuntu on a USB drive.
You will have to modify it to suit your needs.
echo "CAUTION: Check path and devices before you run this script!"
echo "If you don't it can delete your harddisk"
echo "Before you run this script "
echo "- make a fat32 partition (/dev/sdb1) but leave 700 MB unpartitioned"
echo "- make a 700 MB partition (/dev/sdb2)"
echo "- mark /dev/sdb2 as bootable"
echo "- ignore any warnings about symlinks"
sudo syslinux -sf /dev/sdb2
sudo mount /path/to/ubuntu-8.04.2-desktop-i386.iso -t iso9660 -o loop /mnt
cp -rfv /mnt/casper /mnt/disctree /mnt/dists /mnt/install /mnt/pics /mnt/pool /mnt/preseed /mnt/.disk /media/disk-1
cp -rfv /mnt/isolinux /media/disk-1/syslinux
mv /media/disk-1/syslinux/isolinux.cfg /media/disk-1/syslinux/syslinux.cfg