a normal usb install....is live only....files you create are saved /mnt/live/memory/changes
in this dir you will have a copy of the files you add
there's a tut for saving changes in a module and then put it in bt/modules dir
BUT you need to recreate archive each time.....
not so easy........
i prefer deal with 2 partitions even on 1 gb key
basicly here are the steps
i create 800 MO FAT32 part
i create another primary part but EXT2
i ask bt to boot with creating and updating the changes dir on the ext2 part
you can do this easily with entering a cheat code at boot time
boot : bt changes=/dev/sdb3
this will create 2 dirs on the changes partition you created for saving changes
or better you can rebuild mbr with good kernel append parameter
hope you understand me...
ps you can just resize the fat32 my soft have created when installing your usb