How do I make a bootable system on a USB stick?

Hi Guys,
I have four systems at four locations all running Leopard and pretty much identical systems and I want to create a diagnostics tool in the shape of an 8GB USB key that I will always have with me as it will attach to my keyring. A CD/DVD is not an option as these get mislaid or forgotten and having it with the keys means it is impossible to forget.
Anyway I want to install a base system onto this USB key and then add what diagnostics tools I can as space allows. How do I do this please?
Trying to install from my Leopard DVD just causes kernel panics and using a utility like Carbon Copy Cloner simply tries to replicate the whole drive. Even using the 'sandbox' function in SuperDuper creates a bootable drive too large to fit on the key.
Thanks in advance for any advice. Have a good weekend!
Cheers
Rich

Hi Rich
Ted Landau at Macfixit wrote instructions a while back ... there's a set here. It's a couple of years old, so I can't guarantee its Leopard compatibility. Good luck!
Matt

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