I just downloaded and installed Firefox 2.0.0.1 from Mozillas site on a Flash Drive with no problems whatsoever. Now it doesn't hang for long periods while loading like the PortableApps FF 2.0 does.
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Because that version you're using is not portable and is saving all your settings to the profile on your C: drive. Since the C drive is a local hard drive, it's nice and fast... compared to having your data on a slower flash drive. Of course, as soon as you attempt to move that copy to another PC, you'll notice that all your data is gone and it's using the Firefox profile on THAT PC.
Sometimes, the impossible can become possible, if you're awesome!