Thought I should bring up this thread rather than starting a new one..
After experimenting a little with different laptops and USB-sticks, it seems to me that running mkdiskimage is not a decisive factor with the hardware I use. In every case where I was able to get the stick to boot using mkdiskimage, it worked as well with just partitioning (after wiping out just the partition table) formatting and running syslinux/copying files.
Also, if a stick is prepared, it can ALWAYS be used when the computer is able to boot and run off the CD/DVD: Just type knoppix fromhd=/dev/sda1 (or whatever is the partition).... at the boot prompt, and remove the CD/DVD after booting is complete.
The same trick can be used with sticks, if two can be mounted at the same time, or a USB-harddisk and a stick. I set up a 512MB stick with the basic booting, but nothing else, and used it to start booting, reading and running the complete system from larger sticks. This is written running off a 1GB stick started by a 512 MB.

My results with three laptops:
Toshiba satellite: Only CD/DVD booting, running from USB is OK - until interface "dies".
ASUS A3HF: 512MB sticks boot, none bigger.
Dell Inspiron 510m: Up to 1GB sticks boot, none bigger.

Using a 4 or 8 GB stick this way, one may drop remastering - except for doing different configuration changes or adding software not on the DVD. And it is very nice to be able to free up the DVD drive!