
How to install BackTrack to a USB device:
Note: USB installation of BacktTack performs like the Live CD. Currently a persistence BackTrack feature is outside the scope of this tutorial.
1. Download the (Portable Backtrack) USB BackTrack (Extended) version
2. Extract the Boot and BT3 folders to the root of your USB device
3. Navigate to the Boot folder on your "USB device" and click bootinst.bat (click continue if the following error appears)

4. Follow the onscreen instructions to make the device bootable
5. Once the USB install script has finished, reboot your computer and set your BIOS or Boot Menu to boot from the USB device
Reference : http://www.pendrivelinux.com