Here is the procedure that I followed to create the USB installation:
* Make live DVD/USB to use for running the installer
* Have another USB to install to.
-- delete anything on it currently
-- use GParted from the live DVD/USB to make and format partitions for install
-- make one for Root partition, Ext4 formatting
-- make a small Swap partition (500MB - 1GB) if you don't have a lot of RAM on computer
* Run the installer program and choose "Something else" install method
* On partitioning page, select Root partition you made on the USB stick:
-- click "Change" button
-- Use as = Ext4 file system
-- Mount point = /
-- Size = leave as you already made it
-- Format box = doesn't matter if you check it or not (you already formatted it in GParted)
-- Swap partition: no need to do anything with it -- it will be automatically used.
-- Device for boot loader installation = /dev/sdX (substitute correct letter for the USB stick in place of "X"), not /dev/sda (which will be the default value shown).
-- Click "Finish" installation.