Creating A Bootable WinPE 2.0 USB Key

Windows Preinstallation Environment (PE) 2.0 is a slimed down version of Windows (hence all the MiniNT references) that used to be the exclusive domain of OEM's providers. Microsoft has wisely chosen to offer this to the masses as part of the Windows AIK. USB keys can be found just about anywhere these days for next to nothing. Combine the capabilities of WinPE with the portability of a USB key and you just made a very powerful troubleshooting, imaging, and data recovery tool. Here is a quick step by step on how to do just that:
Step 1. ) Get USB Key
You probably already have a few and if not you can purchase these just about anywhere, so I won't tell you where to get one. You should get a USB 2.0 device of at least 512mb in size, but if you plan on putting a lot into a custom PE install or plan on using it to transfer data too then you are better served getting a larger size (2.0-4.0GB)
Step 2.) Download and Install the Windows Automated Installation Kit (Windows AIK)
This deployment oriented tool set contains Windows PE 2.0.
Step 3.) Format the USB key
Note: This must be done from Windows Vista
Start a command prompt and run the following. This set of commands assumes your USB key is detected as disk 1, you should double check that by doing a list of the disks before cleaning it. If you have multiple hard drives you could end up wiping your second drive using this command. You have been warned.
Diskpart
select disk 1
clean
create partition primary
select partition 1
active
format fs=fat32
assign
exit
Step 4.) Setup Windows PE
In this step you will create and customize WinPE for your disk. From the machine that you installed the Windows AIK go to the start menu and select "Windows PE Tools Command Prompt" from under the Windows AIK program folder.
Run Copype.cmd x86 c:\winpe_x86
you can create an 64-bit version by changing the architecture from x86 to amd64
Add customizations to WinPE
copy any tools you want available to the C:\winpe_x86\iso folder such as imaging tools if you want to use this for capturing images (imagex, wimscript.ini)
Step 5 .) Copy Windows PE to USB Key
Insert the USB key into the machine that you have WinPE on and run the following command to copy the contents to the USB Key
xcopy c:\winpe_x86\iso\*.* /s /e /f e:\
change c: to reflect the drive your files on and e: to be your USB key.
There you have it...a quick way to make a handy USB version of WinPE that you can take with you anywhere. These can be used in almost any modern computer that supports USB booting. More information on this and other great things you can do with Windows PE are located in the Windows AIK.

http://windowsconnected.com/blogs/joshs_blog/archive/2007/02/05/creating-a-bootable-winpe-2-0-usb-key.aspx