From what i can work out, It looks like there are some pretty strict ‘rules’ around running Windows 8 ‘To Go’ in relation to the hardware you use. You should be able to use a USB hard drive ok, but when it comes to zip or flash drives, the rules are pretty strict.
It doesn’t just come down to the read and write speeds, but various other transfer rates for different sizes of files. It is also important that the ‘Removable Drive’ flag/bit is set on the stick and that the drive can be written many times without speed degrades to the stick over time.
Here are the only two usb ‘flash’ drives that are currently certified to run with Windows 8 ‘to go’. (This is not from official sources, just what i believe is the case).
(The SuperTalent drive is more a SSD in a flash drive case. WOW!)
Over time, and once Windows 8 ships, there should be alot more drives that are supported. My advice now is to try Win 8 ‘to go’ on a usb drive, rather than a flash drive (unless you want to fork out some serious dough for one of the above drives). Alternatively, just run it in a virtual machine or natively / dual booting off your pc.
Note: If you go down the path of installing the windows 8 image to the usb with imagex and then booting and installing, then it will install but you will have reduced functionality around the windows store, using a live ID and windows update. (trust me, ive tried a few different ways to do this and get around the limitations)
I have read that it may be possible to create a vhd on the usb, install win8 to that and then setup a boot record on the usb to boot off the vhd. ive tried this, but have had no success .. yet. Let me know if you figure this, or another way, out.