So I can confirm that it is possible to install from USB per Sarvatt's suggestion of http://www.devslashzero.com/node/160. I am including my walk-through as I made minor deviations. Standard disclaimer applies: PLEASE be careful with these commands noting that mkfs will erase all contents of the destination device.
The key "trick" from the blog is to NOT partition the usb drive (note the -I flag to mkfs.vfat).
Here is a script which does the necessary steps. You will need to modify the path to the usb device.
In theory, starting with 11.10 (including daily builds) you can simply dd the iso to the usb drive (device not partition). See this post for detailed instructions. Here are the steps I took (after replacing sdX of the fourth line with the correct letter--for me this was "sdb").
I also used gparted to allocate the unused space.
sudo aptitude install zsync
# Daily Builds: http://cdimage.ubuntu.com/daily-live/current/
sudo fdisk -l # to find the correct device
sudo dd if=oneiric-desktop-amd64+mac.iso of=/dev/sdX oflag=direct bs=1048576
# if dd gives problems, drop the "oflag=direct bs=1048576"
However, I haven't had luck with this approach.