Ok here is one that worked for me and I am a really still learning. It was simple enough for me so I am sure it will work for others so I copied and pasted it here. I hope this helps others.

A USB thumbdrive - minimum capacity 2GB
A Backtrack 3 CDROM, Backtrack 4 DVD or an additional USB thumbdrive (minimum 1GB) - Used to partition the thumbdrive.
UNetbootin - A tool to transfer an iso image to a USB drive.
So, without further au dieu, let’s get started!

Partition the USB thumbdrive

If you have a Backtrack 3 CDROM or Backtrack 4 DVD, you are in good shape, if you don’t and are using an additional USB thumbdrive, skip to here and then return once you have a bootable Backtrack 4 device. I know this seems convoluted, but it’s the easiest and most sure way I know to get us where we want to go.

First let’s partition our thumbdrive. I used a 4 GB drive as I read that we would need 1.2 GB for persistent changes. After I got everything working, it looks to me like we can get away with a 2 GB stick if we are careful about regular cleanup of log files. Nessus tends to be the main culprit here.

Regardless of the size thumbdrive we use, we need to partition and format the drive as follows:

Note: I used Acronis Disk Director Suite for the next part

The first partition needs to be a primary partition of at least 1 GB and formated as FAT32.
The second Partition can be the rest of the thumbdrive. It needs to be formatted as ext2.
If you try to use Windows to re-partition the drive, you will likely run into some problems. Windows sees most USB thumbdrives as removable media and does not support multiple partitions on them. It also does not allow us to delete the existing partition from the drive. This is because most thumbdrives have the ‘Removable Media Bit’ set. This blog post describes the situation very well. I would not recommend trying their suggestion since it really isn’t necessary.

The easy way to get around the problem is to re-partition the drive using Linux. That’s why we need the Backtrack CDROM although any Linux system will work. So go ahead and partition and format the drive according the layout above. Once I was done with this step, I switched back to a Windows system for the next few steps.

Make a bootable Backtrack 4 USB thumbdrive

Now we need to download the Backtrack 4 ISO.

Description: DVD Image
Name:: bt4-beta.iso
Size: 854 MB
MD5: 7d1eb7f4748759e9735fee1b8a17c1d8
Download: Click here

So now we have a usb thumbdrive with at least one 1 GB FAT32 partition on it.

The next step is to make it a bootable USB thumbdrive. There is a much easier way now. We are going to use the UNetbootin tool mentioned above. It is super easy to use. Just start UNetbootin, select the Backtrack 4 ISO, select the USB drive and click okay. You may get a warning that files exist on your USB drive. After making sure you picked the right one, tell it to go ahead and replace the files. It’ll chug along and before you know it you will have a bootable thumbdrive. Much easier than the rigmarole we had to go through before.

UNetbootin download http://unetbootin.sourceforge.net/

Persistent Changes

Let’s configure persistent changes while booted to Backtrack 4. Once we have booted into Backtrack we need to configure the rest of the thumbdrive if we haven’t already done so. I used fdisk to create a second partition from the remainder of the drive and formatted it with mkfs.ext2. In my case my usb drive was /dev/sdb.

Once we have a formatted second partition, mount it and create a changes directory in the root of the file system.

open a terminal windows
mount /dev/sdb2 /mnt/sdb2
cd /mnt/sdb2
mkdir changes
Next we need to make some changes to how the system boots. Execute the following:

cd /boot/syslinux
chmod +Xx lilo
chmod +Xx syslinux
Open syslinux.cfg with your favorite editor and make the following change. Note: I copied the boot definition I wanted to change and created a new entry so I would have a fall back option if something became broken. Again, I booted to KDE.

Find the line “LABEL BT4″.
Copy that line and next 3 and paste them right below the existing line.
Change the “LABEL BT4″ to something you want like “LABEL BT4-persist” and description to something like “MENU LABEL BT4 Beta - Console - Persistent”
Change the line that begins with APPEND in your copied section by adding “changes=/dev/sdx2″ immediately after “root=/dev/ram0 rw” where the x is the drive appropriate for your system. In my case it looks like this, “….root=/dev/ram0 rw changes=/dev/sdb2….”
I placed the MENU LABEL BT4 Beta - Console - Persistent at the top so it starts right from there on start up.

Save your changes and exit the editor.
That should do it. Reboot and select the option you setup configured. To test it, create a file and reboot again. If your file is still there, everything is golden.