I use a VirtualPC environment for all my software development work, usually using a unique environment for every customer. This eats up the drive space in my laptop pretty darn quick. So after reading about running a VirtualPC image from a USB Flash Drive I decided to give it a try. I purchased a 32GB memory stick and plugged it in.
After a little experimenting I can now confirm it runs the VirtualPC nice and fast. But writing data to the disk and reading at the same time is horrendously slow. So you need to do two things:
a) Make sure the .vmc file is NOT located on the flash drive
b) Enable UndoDisks
These two steps will create a temporary file on your harddisk, in the folder where the .vmc is located. This means that while using the drive you only read from the flash drive, but never write.
When you shut down the VPC you can choose to commit the changes to the flash drive, this may take a little while, so only do it when you have time to wait for it to complete.
I usually choose 'Save State' which allows me to restart the VPC where I left off.