Brad's Blog has a guide on howto install and boot Apple's Mac OS X operating system on a USB stick. Here's a short snip:
Remember when it was first revealed the Windows XP could be installed and booted off of a USB flash drive? Well, great for Windows users. What about Mac users? We were left out in the cold. If one were to search hard enough in the vast Web index that is Google, one could find just the snippets of how to boot a system from a USB drive, how to set a drive as bootable, yadda yadda yadda. Nothing guiding the way to creating a bootable installation of Mac OS X on a flash drive. I’m here to help.