Just a summary of what I did for other people looking for help.
This made my 2 gb USB Pen Drive boot BT3 beta and save every change I made on the same disk it was booted from.
In order to have backtrack save changes to the same drive it is booted from, it
should have at least 1.2 gb. If the usb pen drive has less than this, do not worry, you can make the changes get saved to your hard disk.
For that, please follow shamanvirtuel's tutorial farther up.
Step 1. Split the usb pen drive into 2 partitions*. First partition (A) should be precisely 1 gb and FAT32 filesystem. Second partition (B) should have the remaining diskspace and be in EXT2 filesystem.
Step 2. Copy bt3 and boot directory to partition A.
Step 3. Manually create folder "changes" at root directory of partition B.
Step 4. Execute /boot/bootinst.sh
Step 5. Open terminal and CD to /boot/syslinux on partition A. Type
Step 6. Open /boot/syslinux/syslinux.cfg
chmod +Xx lilo
chmod +Xx syslinux
At the end of the APPEND line, under the mod you are planning to use. (Example KDE or simply text mode), add:
XXX Should be replaced with the name of partition B on the USB Pendrive.
In my case, /dev/sdb2.
Step 7. Reboot and select the mode where you added the changes mod from step 6.
Credit goes to SV + rest in this thread, who helped me get it to work
*I used qtparted from backtrack to split the usb into 2 partitions(easy with user interface). You could also follow DaKahuna's guide further down.
backtrack 3 beta bt3 usb save changes usb drive persistent changes save configurations to usb pen drive