had some problem but finally figured it out,
after you made the stick (usb or sd) bootable under windows put it in the computer you want to use it in and boot up bt3 from the stick, when bt3 starts up go to the "system:/media/sdb1/boot/syslinux" (or whatever it is, mine is sdb1) directory and replace syslinux.cfg with the one that is attached, double click and it will open up in a text editor, edit the first block in syslinux.cfg so it matches your ext2 partition on your stick as shown below.
in your ext2 partition make a folder and name it changes
next time it boot up you can start doing changes and it will be saved.
I have tried this in both of my laptops, hp nx7300 and asus eee 700 2gsurf with 4gb ultra II and 2gb extreme III sd cards and 2gb usb stick.
Use "unzip syslinux" in konsole to unzip syslinux.cfg that is attached.
MENU LABEL BT3 Graphics mode with Persistent Changes
APPEND vga=0x317 initrd=/boot/initrd.gz ramdisk_size=6666 root=/dev/ram0 rw changes=/dev/sdb2 autoexec=xconf;kdm