Cesium, I don't know if you have the same recovery DVD as I have, but on mine it appears that you CAN install it to a USB.
I don't have a large enough USB stick to fully test it, but I did try it with a 2Gib drive.
First, I unhooked the ribbon cable to the HD since it was my wife's computer and she wouldn't be very understanding if I wiped her drive clean

.
I stuck the DVD into the optical drive and restarted to boot from CD/DVD. The screen it boots into gives three choices:
- Install - Acer Aspire One
Create Recovery USB Drive
Boot from Hard Disk
Install is the default option, so if you don't use the arrow key to choose one of the other options within a few seconds, it will automatically go into the installer.
Once the installer loads, it says:
Welcome
Welcome to the Acer Recovery Management for Aspire one. This program will assist you to return the system in your computer to the factory defaults. Press [->] to cotinue, or press [Exit] to quit.
I pressed ->
The next screen says:
Select Partition
- Whole disk 1 /dev/sda 1920MB
Since I had disconnected the HD, that was the only choice, so I chose it and continued.
The usual advisory box popped up that said:
Warning
All data on the selected partition will be overwritten! Press OK to continue or Cancel to exit.
I chose to nuke it and a progress bar came up.
After about 10 or 15 minutes it aborted with an error:
Error,the program cannot continue. Press OK to exit the program.
So that was as far as I could get with my tiny 2 gig thumb drive. I don't know if you need a 4 or 8 gig drive to make it work, but I don't see any reason why it wouldn't fully install onto your thumb drive.
The only problem you might have is that it's a crapshoot trying to figure out which USB drives will boot off which computers.