[est1895]

Can you use a flash drive with the operating system on it to use as the main drive? and not need hard drive either? 

[Tyrian]

Yes, you can.  It's easiest to do with Linux distros, like Ubuntu.  However, they usually aren't persistent, meaning you can't save data to the drive.  It's possible to make a USB OS persistent, but it takes some additional work.  Also, unless you're using a high-end USB 3.0 flash drive, it'll be slow, no matter how much RAM you have in your system.  Really slow.  (I've done it, with full disk encryption to boot.  You won't be doing anything fast.)

[Aurora Paradox]

I currently have Ubuntu 11.04 running on an 8 GB Patriot flash drive.  The speed is actually quite reasonable.  I'm not using a USB 3.0 either.  I do have 8 GB of RAM in my system though.  However, I have tested the flash drive in other systems with much lower specs and the speed remained quite good.

Installing Ubuntu on a flash drive is quite similar to installing it on a hard drive.  I installed it off a CD.

Here is the basic outline I followed.

1.  Unplug hard drive power cables.  I wanted to make sure the boot loader was installed in the proper place.

2.  Setup BIOS to boot from CD.

3.  Booted into Ubuntu and started install.  The install will take awhile.  Internet access is recommended.

4.  Once the install is complete.  Reboot and make sure everything is in order.  It takes a bit to load but once the OS is up an running you should have decent speed.

5.  Once your satisfied shutdown the PC and reconnect your hard drive power cables.  You might have to change your BIOS settings back as well.

When your finished you should have an flash drive based OS that runs identical to an OS on a standard hard drive.

I hope this answers your question.

EDIT:

@Tyrian: The fact that you were running disk encryption could have contributed to your slow speeds.  Another possibility is that the flash drive you were using was just slow.  Not all flash drives are created equal.

[LordMelvin]

As an alternative to aurora's option, most liveusb creators support the creation of a persistence file on the disc. LiLi www.linuxliveusb.com will set up a bootable flash drive from windows from the bootable iso image of just about any distro out there, or if you're already running linux, there's several different utilities - they vary by distro, but many have an option to create a persistence file, which stores changes on shutdown.

And for the record, I've never tried fulldisc encryption on a bootable flash drive, and I've never had speed problems.

[TwentyPercentCooler]

As an alternative to aurora's option, most liveusb creators support the creation of a persistence file on the disc. LiLi www.linuxliveusb.com will set up a bootable flash drive from windows from the bootable iso image of just about any distro out there, or if you're already running linux, there's several different utilities - they vary by distro, but many have an option to create a persistence file, which stores changes on shutdown.

And for the record, I've never tried fulldisc encryption on a bootable flash drive, and I've never had speed problems.

Yep, was gonna come in here and mention this. I pretty recently saved an old laptop with partial hard disk failure by just making it boot Ubuntu 11.10 from USB. I only use it for web browsing anyway, so it's actually kind of nice. Also, for the record, not encrpyted; seems a bit unnecessary in my case as the flash drive never leaves my room.

[Nuke]

ive booted winxp off of a cf card. its really slow.

[Aurora Paradox]

As an alternative to aurora's option, most liveusb creators support the creation of a persistence file on the disc. LiLi www.linuxliveusb.com will set up a bootable flash drive from windows from the bootable iso image of just about any distro out there, or if you're already running linux, there's several different utilities - they vary by distro, but many have an option to create a persistence file, which stores changes on shutdown.

And for the record, I've never tried fulldisc encryption on a bootable flash drive, and I've never had speed problems.

There is one downside to the live usb option.  They don't accept program updates.  You won't even be able to upgrade to latest version of Firefox.  I've also found they can be a bit temperamental.

[S-99]

Can you use a flash drive with the operating system on it to use as the main drive? and not need hard drive either? 

Yes you can. Just officially install the os to the thumb drive.

1.  Unplug hard drive power cables.  I wanted to make sure the boot loader was installed in the proper place.

I understand why you did this. In the future when going through the installer, before you hit install, you do get a chance to tell grub which drive you want it on when you click advanced.

As an alternative to aurora's option, most liveusb creators support the creation of a persistence file on the disc. LiLi www.linuxliveusb.com will set up a bootable flash drive from windows from the bootable iso image of just about any distro out there, or if you're already running linux, there's several different utilities - they vary by distro, but many have an option to create a persistence file, which stores changes on shutdown.

Turning a flash drive into a liveusb is different than installing linux onto a thumb drive. Liveusb is a frugal install. In any sense i don't consider liveusb an install. Really tools like unetbootin just take apart a livecd, dump it onto a flash drive, and essentially trick the flash drive into thinking it's a cd. The persistance definitely helps, but the liveusb isn't really any handier than a livecd (it boots faster and great for computers with no optical drives of any kind; that's about it). That's my reasoning behind why i don't consider liveusb's even to be a frugal install (it holds way too much in common with just burning a livecd, just no persistence with a cd) let alone an official install.

Actually installing linux onto a thumb drive. Whatever the reason may be for doing so (there's plenty, i don't care to list them), it will be and act like an official install because it is. Just make sure to turn off journaling for the file system.

[LordMelvin]

As an alternative to aurora's option, most liveusb creators support the creation of a persistence file on the disc. LiLi www.linuxliveusb.com will set up a bootable flash drive from windows from the bootable iso image of just about any distro out there, or if you're already running linux, there's several different utilities - they vary by distro, but many have an option to create a persistence file, which stores changes on shutdown.

Turning a flash drive into a liveusb is different than installing linux onto a thumb drive. Liveusb is a frugal install. In any sense i don't consider liveusb an install. Really tools like unetbootin just take apart a livecd, dump it onto a flash drive, and essentially trick the flash drive into thinking it's a cd. The persistance definitely helps, but the liveusb isn't really any handier than a livecd (it boots faster and great for computers with no optical drives of any kind; that's about it). That's my reasoning behind why i don't consider liveusb's even to be a frugal install (it holds way too much in common with just burning a livecd, just no persistence with a cd) let alone an official install.

Fair enough, and it is, certainly, the better option for anyone who's computer-ableized enough to do it. I only made the suggestion because it's easier to do if you just need the minimal environment, or only will be using the usb for a limited time.

...Just make sure to turn off journaling for the file system.

Very good advice.