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You can't turn just _any_ ISO into a bootable image, because the ISO needs to contain the drivers for everything needed to run your PC. A normal Windows application ISO would be #%@! out of luck, because there would be no Windows kernel/user dlls for the application to call. Since there's no...
>> Can someone say 'ReadyBoost'? Don't need it, thanks to uber-fast boot time and more efficient disk/RAM caching. I can say PenDriveLinux, though. :)
Boot from any Linux LiveCD, copy off any files on it you need, then open a terminal prompt and enter dd if=/dev/zero of=/dev/sdX BE SURE TO REPLACE 'X' in the above line with the proper letter. If in doubt, unplug the thumbdrive, plug it back in, wait a second and type "dmesg | grep sd"...