Storing the whole OS in a USB pendrive is very easy and saves us from creating and managing cd images. And we can carry our Linux OS with us in a USB pendrive very easily.
So if you want to boot from a USB pendrive from virtualbox or VMware on a windows machine, you can do that by the following tutorial.
1. Download and Install VirtualBox (Install to the default path).
2. Click Start > Run Type diskmgmt.msc and click Ok (In Vista/Win7 use the Start > Search Box)
(1) Locate your USB Disk #
3. Open a command prompt
cmd.exe (run as admin in Vista/Win7)
4. Type cd %programfiles%\sun\virtualbox
5. Type the following (replace # with your USB Disk number from step 2)
VBoxManage internalcommands createrawvmdk -filename "%USERPROFILE%"\.VirtualBox\usb.vmdk -rawdisk \\.\PhysicalDrive# -register
6. Start VirtualBox (run as admin in Vista/Win7) and create a New Virtual Machine Create a New Virtual Machine
7. When prompted for a Virtual Hard Disk, tick use existing hard disk and select usb.vmdk Select Existing Virtual Disk usb.vmdk
8. Once you have finished creating your New Virtual Machine, click StartStart VirtualBox
If all goes well, VirtualBox should now be running the Linux version installed on your USB device emulated from within Windows.