I'm a confused noob...
Using Backtrack 5 R2 32 bit KDE installed on a 4 GB USB stick. I'm running it on a Lenovo T410i. It boots to the Backtrack wallpaper with a command line window in the middle at the root prompt. However, there doesn't seem to be a window manager running - I have no desktop, no mouse, no icons or windows. I tried startx, but the screen goes black and the capslock blinks. I also tried the 64 bit iso, but it won't boot - it goes directly to a blank screen with blinking capslock.
I can successfully boot ubuntu 11.10 desktop installed on the same USB stick and everything works fine.
4GB is not really the size you need and that is going to cause you some problems. Backtrack recommends a 8gb flash drive or larger in order to run the thumbdrives. And...
This should fix your problem.