A computer that allows for booting from a USB port.
I used a Dell Optiplex GX280, GX620, Latitude 800, P4 Home built.
A Bootable floppy disk or CD.
I used a Windows 98 bootable CD and a Windows 98 boot CD.
[update]
Used a Windows 2000 boot cd and installed the stripped down OS.
Working nicely..
Probably trying Red Hat after the NTFS test.
Utilities with the ability to create a master boot record, create partitions, set active partitions, and format and transfer boot files to the active partition
I used the DOS FDISK and FORMAT.
[update]
As long as the OS sees it the partition manager in 2000 saw it as well.
Formated Fat32 and installed.. Didn't want to try NTFS.. Will next time.
The USB drive that you want to make bootable.
I used a 512 MB Jump Drive
[update]
1 Gig No name Generic Brand..

Directions
1. Make the USB drive the first in the drive sequence.
How?Why?? fdisk does not allow for a partition to be set as ACTIVE or bootable, unless it is the first drive. It is most likely that your hard drive or CD-ROM is set as the first drive. This needs to be changed. How?? Setting your USB drive to be the first in the drive sequence can be done by following ONE of the methods below. No matter which method you follow, the computer MUST be booted with the USB drive plugged in into the computer. Take a note of how the options that you are about to change were set before, as they will need to be changed back later.
# 1. BIOS drive sequence option.
Depending on your BIOS, there may be an option to change the drive sequence. On mine, there was an option labeled "Hard-Disk Drive Sequence". If your BIOS has this or a similar option, make sure you change the sequence so that the USB Drive is listed first.
# 2. Disabling other hard drives.
Again, this is done from the BIOS. Different BIOS's may have different options to disable the hard drive. On mine, the system had just one hard drive. I changed the option labeled "Primary Drive 0" to "OFF".
# 3. Unplugging the hard drives.
If your BIOS doesn't have an option to change the drive sequence or to turn off the hard drive, you can turn off your computer and unplug your hard drive(s). Make sure you know what you are doing here. Opening your computer case may result in voiding your computer warranty if you have one.
2. Boot the computer from the boot floppy/CD into the command prompt with the USB Drive plugged in.
3. Run fdisk
[update]
With Windows 2K I just booted from the install CD and choose to
install the OS on the drive formating the device with Fat32.
For a win2k install most of the next few steps were not needed.
4. Use fdisk's "Set Active Partition" (option 2) to set the primary partition on the USB Drive to ACTIVE.
This step assumes that a primary partition already exists on the USB Drive. If this is not the case, use fdisk to create one. As noted in step # 1, fdisk will not allow for setting the the partition to ACTIVE unless the drive the partition is on is the FIRST in the drive sequence.
5. Exit fdisk.
6. Reboot the computer from boot floppy/CD into the command prompt with the USB Drive plugged in.
7. At the command prompt enter the following command: dir c:
This step is just to verify that the C: drive is actually the primary partition on the USB Drive. Regardless of the result that the command generates whether it be a listing of files or an error message, what is important here is to make sure that the size of the primary partition on the USB Drive is roughly equal to the sum of the empty space and the used space.
8. Format and copy the boot files to the primary partition.
At the command prompt, from the directory where FORMAT.COM is located, enter:format /s c:
9. Run fdisk /mbr
"fdisk /mbr" writes the master boot record, in this case to the USB drive, without altering the partition table information.
10. Restart the computer and choose booting from the USB Drive. If all goes well, you should see a C:> command prompt.
11. Change the computer settings back to what they were before step # 1.
More notes
Win2K install was not perfect but it got done. To do this I would just disable all non essential drives in the process. Extra CD/DVD off (if your not using it), any and all internal hardrives, iomega drives, etc...