I wanted to have a bootable image of Ubuntu on a USB drive for a project I was working on. It also had to have persistent saving as I wanted to retain the programs,etc that was installed on Ubuntu. A partition was created to allow for persistent saving. Here's how I did it.
1) Download the Ubuntu ISO from here. I used 11.04 (Natty).
2) Download the Universal USB installer from here.
3) Insert your USB stick and run the Universal installer. The wizard is self-explanatory. I assigned 4GB to the persistent file size as I had a 16GB drive. Assign at least 3GB to this so that you would not run into space issues at a later point.
4)Hit create. The installer took about 15-20mins to create the drive. So be patient and wait for it to complete. That's it!! it was that easy...
Now you have a pendrive with Ubuntu on it to run on any computer. Whenever you start the computer, ensure that it looks at the USB to boot from. This can be permanently set through the bios. Google your PC bios setting for instructions on how to do this.