Is there any way to go over the 4gb the GUI programs seem to use? I have a 16gb key and want to utilize all of the space for the OS.
Yes you can, follow the regular tutorial for setting up backtrack, where you use fdisk to partition the usb. I usually size the fat partition at +2500M, and partition the rest of the drive as ext3, by leaving the input values blank. I have installed on a 8 gig usb, and it works fine, giving me a little over 5 gigs of available space.