"I recently acquired a 256MB USB pendrive that I use for storing personal documents and work-related stuff. As a Linux fan who wanted to make the most of his new toy, I went looking for the simplest, smallest distro I could find that could boot from a pendrive. I found Debian-based Damn Small Linux, whose long list of bundled applications fits into a meager 50MB. The more I use it, the more I like it.
"You can test DSL in a variety of ways: you can boot it from a business card CD, install it on the hard drive, run it from a USB pendrive, or even run it from within Windows (using Qemu). After a quick search on the project's wiki, I found the section related to booting from USB.