UNetbootin allows for the installation of various Linux/BSD distributions to a partition or USB drive, so it’s no different from a standard install, only it doesn’t need a CD. It can create a dual-boot install, or replace the existing OS entirely.
I’m using it right now to make a bootable Ubuntu install on my usb drive.
Ran into some issues where it wouldn’t want to mount the USB stick as the Cdrom source. Following these instructions fixed it.
http://ubuntuforums.org/showpost.php?p=4404569&postcount=37