I does not prompt you. it expects you to see, below the iso select box, another box with the words "space used to preserve files across reboots(ubuntu only)"
This means persistence and Ubuntu only means any Ubuntu derivative or any thing that is has ubuntu as its base - Mint, Pinguy,Zorin,Peppermint, Elementary, Pear, ect.
You need to use at least 500mb, but 1000mb and above is better for persistence.
BTW The long pause is while the image is being writen to the usb... It could take 10mins depending on your computer.