Installing Vista from a USB Flash Drive
Microsoft Employee Kurt Shintaku has recently published a very useful guide on his blog explaining how to install Windows Vista directly from a USB thumb drive. Personally, I have not tried this out yet, but according to the author, installing Vista using this technique should take you about half the time of a standard install.
Why would someone want to install a client OS from a thumb drive instead of a DVDROM or over the network? One reason: Performance. Installing Windows Vista from a high speed USB flash drive is in my experience the easiest & fastest way to complete a Windows Vista install. This is much faster than using a DVD, gigabit ethernet, or possibly even some external USB 2.0 hard drives, due to differences in access speed & transfer rate.
Read more (via HardOCP)