The Tech Report writes Windows 8 will offer a Portable Workspace Creator that will enable users to run the operating system from a USB device:
Details on this new feature are still scarce. However, it's said to require at least 16GB of storage capacity. Let's hope that requirement isn't a reflection of Windows 8's install footprint. I suspect USB devices will also need to meet minimum performance specifications to house a personal workspace.
Interestingly, this new feature is supposed to be geared toward enterprise customers. If Windows 8 comes out in multiple flavors, which seems likely, you might have to pony up for a Professional or Ultimate edition to create portable Windows installs.