A Closer Look at Damn Small Linux

In this article you will learn how to turn a blank CD and an inexpensive USB keydrive into a powerful, portable, take-along operating system complete with modern applications like Firefox, a Web server, and multimedia tools. All this can be done using free Open Source Linux software.

The article goes on to explain how since the memory footprint is small (typ. <50megs) \home\ directory) on the thumb-drive.
I'm going to give this distro a go and I'll report back.