EDIT: Alright I got it fully working. Managed to install BT4 on a 4GB USB stick. It's the minimum it needs.
I've been trying to install BT4 on a 4GB USB stick and I haven't really been succesful.
I did all the above steps while changing the /dev/sda to /dev/sdb (cause sdb is my USB stick) but it's still not working. When I put the USB in it says ... well, it just doesn't recognize it as bootable.
Also, it looks like to /root partion needs at least 3.5 GB otherwise it can not copy all the contect there.
I've set the boot parition to 100MB and the Swap to 250MB.
Edit: Never mind, I got it working, but now after it passes the boot menu it gives the fallowing:
Kernel panic VFS:unable to mount root fs on unknown-block (8,11)
I will probably figure it out in the end. Thanx anyway.