I have a 4GByte-USB-Stick and want to install Debian on it, so I can carry Debian in my pocket and user (almost) any PC.

Prepare the Stick

Inside the Host-OS

Note, I use Debian to create this stick, folowing packages should be installed

apt-get install debootstrap gparted grub

Use gparted to partition my USB Stick:
- First 500 MByte FAT32 partition so that I can share Data with windows
- Second ca. 3500 MByte ext4 partition for Debian
Have a look at USB-Stick performance and reformat the second partition with the right options.
create a Folder on my Debian-host to mount the usb stick

# mkdir /mnt/usb

mount the stick

# mount /dev/sdh2 /mnt/usb/

install debian:

# debootstrap --arch i386 stable /mnt/usb

chroot to the usb-system:

# chroot /mnt/usb

Inside the USB-Stick (chroot)

install what you need to work:

apt-get install less vim locales ssh console-setup

dpkg-reconfigure locales

(optional) adapt /etc/apt/sources.list to reach a nearer mirror, then update cache:

apt-get update

install a linux kernel

apt-get install linux-image-686

Ignore the error messages about df not working: we did not mount /proc

install grub

apt-get install grub

Grub also complains a lot. Ignore this to. When Grub asks if you are sure you do not want to install grub in a partition, say yes.

edit different files:
- /etc/network/interfaces
```
auto lo
iface lo inet loopback
auto eth0
iface eth0 inet dhcp
```
- /etc/hostname
YOUR-HOSTNAME-HERE
- /etc/fstab
proc /proc proc defaults 0 0
UUID=your-disk-uuid / ext4 errors=remount-ro 1 0
- to get your disk UIID, do "ls -l /dev/disk/by-uuid/", and search for your usb-drive partition
lrwxrwxrwx 1 root root 10 Nov 2 20:42 abcdef-1234-000-1234-abcfed -> ../../sdh2
- Alternative: run "blkid" as root
change root password, create a user

Install Grub

From the host-OS (not USB Stick!)

Be sure to change /dev/sdh to your usb stick drive (not patition) in folowing line

grub-install --recheck --root-directory=/mnt/usb /dev/sdh

Edit /mnt/usb/boot/grub/grub.cfg to match this:

 
menuentry 'boot Debian' {
        insmod part_msdos
        insmod ext2
        search --no-floppy --fs-uuid --set root <your UUID here>
        echo    'Loading Linux'
        linux   /vmlinuz root=UUID=<your UUID here> ro  quiet
        echo    'Loading initial ramdisk'
        initrd  /initrd.img
}

You are done, boot on your USB stick and do what you want on your new Debian GNU/Linux! I used the chroot to install kde (kde-plasma-desktop), iceweasel and so on, so I can do something else during the installation.

What next

set the level of questions debconf should ask:
- dpkg-reconfigure debconf

Sources

http://www.flimzy.com/index.php/Install_Debian_on_USB