Actually, it has been accomplished,, I don't care what Google says.
You can run Vista from a USB drive, and 7 (though not stable) does work.
Although, yes, Winbuilder has made the process a bit more complicated.
Quote:
running your OS from a portable USB hdd will be painfully slow
XP (or more appropriately), BartPE or UBCD4WIN both work very well off of a fast USB drive.
When and where it will be slow depends on the system it is being run on.
The system in my specs, runs it extremely well. BartPE has been a life saver on more than a thousand occasions, fixing XP, Vista and 7.
Quite honestly,, I don't (literally) leave home without my thumb drive.