Running a boxee media server from a usb drive

I'm replacing my current boxee server with a little ion nettop.  It will have an atom 330, ion graphics and 2gb ram.  Instead of putting a hard drive in it, I want to use a usb drive with a persistent linux install to run the OS.  For the sake of minimizing noise, heat, power consumption...  I'm thinking of using one of the lightweight ubuntu variants or ubuntu minimal, mainly because boxee works best in ubuntu.  I'm also toying with using arch since boxee-source is available in AUR.
Will running it from a usb drive cause me any issues? 
All the media will be stored on an external hard drive or streamed over my network/internet.  Theoretically, it shouldn't be doing a done of reading/writing to the flash drive correct?  Shouldn't everything be loaded into ram?
Thanks.  Just trying to get a some opinions of people smarter than me before I go through with this.

Network boot?
I only throw this out there because when my father finally upgrades his TV I'll pitch in a lightweight build so he can stream media from my system instead of asking me "hey can I get some new movies on my usb drive" to watch on his laptop. I had been toying around with the idea of doing a network boot so I can more easily manage the upgrades/system from my end... rather than taking the twenty steps to the living room with a keyboard.  Additionally, the very same reasons you put forward were also considerations of mine. I also considered a USB boot drive, but concern about the longevity of such a solution led me to consider the PXE solution.
(plus since I know next to nothing about setting up such a system it would be an excellent opportunity to learn)

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