Dual boot from USB flash drive?

Is it possible to dual boot from a USB flash drive? Also is it possible to boot the operating system from an ISO image (like the Ubuntu Live CD)?

How would you go about doing this and what software would be needed?

From serverfault Tim Wardle

• I have done this only recently - works really well. I have an 8GB usb key with several ISO images on it. When I boot from the key, I get to choose which ISO to boot from. Pretty damn cool. This is all courtesy of GRUB. Instructions here:

  http://themudcrab.com/acronis_grub4dos.php

  In the example it is showing how to boot a single Acronis recovery ISO, but you can add as many as your key will fit into the menu.lst txt file.

  A word of warning though, the ISO images MUST be contiguous on disk (not fragmented) so copy them all at once, and if you have to delete one and/or replace it, you may have to delete all of the ISOs and re-copy them.

  You can check to see if the ISO is contiguous by running:

  c:> chkdsk z:\myiso.iso

  where Z: = your flash key.

  Have fun!

  Brent : Does this method allow for any customizations to be saved on the USB key (ie - save docs/bookmarks etc in a persistent home directory)

  x0n : oh, you mean you want to install an O/S onto the usb key like it was an actual disk. Sure, you can do this. The method I am talking about is for booting WINPE like environments where a ramdrive is typically used for temporary r/w.

  Simurr : I'm guessing if you want the system booted from an ISO to point to a certain home directory you would have to set that up yourself. Grub is a bootloader and does not configure any system variables.

  Daniel : @x0n - You said, "you can do this". Could you post another answer/modify your current answer to explain how, unless your current answer already is persistent? If your current answer already does work, could you edit it to make this clearer? Thanks.
  From x0n