I want to install ubuntu on a 32gb flash drive, so that I can use it as a live-OS, and use it between different computers. However, I am not sure how to go on doing this, because I have never done a manual Ubuntu installation ( I always use the default settings to write it alongside Windows on my hard drive.)

I am thinking of one of two methods, either make it a startup-disk with persistence, or installing it using a Live CD on the USB using a manual installation. My question is how much allocation should be necessary for each method, and which is better. I want to use 12.04 LTS (12.10 is incompatible with my desktop), and also I want to make sure that I do not run out of space quickly. If, for instance, I download 5 gig's of data, and I have only 1gb persistence, would that data be lost after next reboot. How do I make sure this doesn't happen?