This started with my ideas in this topic: http://ubuntuforums.org/showthread.php?t=472202
I finally got this to work using the Windows OS and the HP Format Tool. This was tested on a 2GB Kingston USB Flash Drive. I won't get into how to format your flash-drive since im assuming that your flash drive is bootable. You can go to pendrivelinux's website to learn how to make your flash-drive bootable. When your in the pendrivelinux website make sure your looking at the DSL installation method and not the Ubuntu.
To start off, make copy's of the Desktop CD and Alternative CD to different folders on your desktop.
The Desktop CD will be your primary cd, You will be moving a few files from the Alternative CD to the Desktop CD.
1. Copy all the files in the Alternative CD's /install directory to the Desktop CD's /install directory. Click 'No' if it says 'do you want to replace?'.
2. Now open up the /isolinux directory and open the isolinux.cfg. For this you can open up the Alternative CD isolinux.cfg and just copy the menu labels and there contents to the isolinux.cfg of the Desktop CD, but I will just give you my premade one.
I wouldn't recommend you to run this of a CD even if it would be faster. Since this is beta test It will probably be slow and it will give you errors. One of the errors I got was 'There was an error starting Gnome settings daemon'.Code:DEFAULT /casper/vmlinuz GFXBOOT bootlogo GFXBOOT-BACKGROUND 0xB6875A APPEND file=/cdrom/preseed/ubuntu.seed boot=casper initrd=/casper/initrd.gz quiet splash -- LABEL live menu label ^Start/Install Ubuntu in GUI kernel /casper/vmlinuz append file=/cdrom/preseed/ubuntu.seed boot=casper initrd=/casper/initrd.gz quiet splash -- LABEL text menu label Install Ubuntu in Text-Mode kernel /install/vmlinuz append file=/cdrom/preseed/ubuntu.seed initrd=/install/initrd.gz quiet -- LABEL cli menu label Install CLI Ubuntu kernel /install/vmlinuz append file=/cdrom/preseed/cli.seed initrd=/install/initrd.gz -- LABEL xforcevesa menu label Start Ubuntu in safe ^graphics mode kernel /casper/vmlinuz append file=/cdrom/preseed/ubuntu.seed boot=casper xforcevesa initrd=/casper/initrd.gz quiet splash -- LABEL driverupdates menu label Install with driver ^update CD kernel /casper/vmlinuz append file=/cdrom/preseed/ubuntu.seed boot=casper debian-installer/driver-update=true initrd=/casper/initrd.gz quiet splash -- LABEL check menu label ^Check CD for defects kernel /casper/vmlinuz append boot=casper integrity-check initrd=/casper/initrd.gz quiet splash -- LABEL rescue menu label ^Rescue a broken system kernel /install/vmlinuz append rescue/enable=true initrd=/install/initrd.gz -- LABEL memtest menu label ^Memory test kernel /install/mt86plus append - LABEL hd menu label ^Boot from first hard disk localboot 0x80 append - DISPLAY isolinux.txt TIMEOUT 300 PROMPT 1 F1 f1.txt F2 f2.txt F3 f3.txt F4 f4.txt F5 f5.txt F6 f6.txt F7 f7.txt F8 f8.txt F9 f9.txt F0 f10.txt
Since this is for a USB Flash Drive you will need to make it bootable with syslinux. I used syslinux for windows since the one for linux made the ldlinux.cfg but it didn't work correctly. It was practically empty. You will also have to rename the isolinux.cfg to syslinux.cfg and move all the contents of /isolinux to the root of your flash drive.
PS: Make sure that you format the Flash Drive as Fat32 with the HP Format Tool.
Other Distro's and Linux utilities that worked:
Debian Etch ( Net Install )
Ubuntu Feisty Mini ( 10 MB Net Install )