This blog explains how to create a bootable Ubuntu Lucid Lynx (10.04) USB pen drive with persistent storage. Persistent storage means that all changes made to the system settings and all files in the user's home directory are saved to the pen drive and are available after system reboot.
Connect your USB pen drive.
The Ubuntu Lucid live system supports persistent storage by default. On an existing Ubuntu Lucid system System / Administration / Startup Disk Creator on an existing Ubuntu Lucid system. If you have an existing Ubuntu Karmic system, run
sudo apt-get install usb-creator to install the Startup Disk Creator program, and then run System / Administration / USB Startup Disk Creator.
Make sure that the Stored in reserved extra space is selected (it's selected by default).
Download the live CD ISO image to your hard drive from http://releases.ubuntu.com/lucid/ubuntu-10.04-desktop-i386.iso. If you want to download from a faster mirror, please find the ISO image link on http://releases.ubuntu.com/lucid/. For maximum compatibility, select the Intel x86 (or i386, or 32-bit) version. The download may take 30 minutes or more.
In the startup disk creator window, specify the downloaded
.iso file by clicking on the Other... button.
For maximum compatibility, format your pen drive, by clicking on the Format button in the startup disk creator window.
Click on the Make Startup Disk button.
Eject (remove) the USB pen drive in the file manager. Disconnect the pen drive.
Boot the computer from your USB stick as usual. There is now configuration necessary. All files you create in the live system in the user's home directory, and all settings you change get retained through reboots.