Am I Missing Something?

The apps I've done for U3 work the same as the stand alone portable apps released here. Neither leave personal details behind. U3's Launchpad does leave a file or two behind on most systems, it seems, within C:\Documents and Settings\user\Application Data\U3. (On my system, I currently have cleanup.exe within a subdirectory there) Some U3 apps leave bits behind, too. Like with standard portable apps, it's up to the U3 app itself not to leave traces on the system and to clean up after itself.

Be careful on the U3 password protection thing. Unlike something like TrueCrypt, it doesn't appear to encrypt your drive or data. It just appears to prevent the second drive from being 'inserted'. I'm not sure how secure that is and I've had a couple interesting reports about it. If you're keeping important bits on a U3 device, I'd suggest keeping em in one of the password managers like Pass2Go which lets you use AES, Blowfish or RC6 encryption. Important bits on a regular device, use something like Pass2Go or Keepass. Or encrypt the whole drive with TrueCrypt.

Thanks for the comments - they reflect my own experiences well. I actually arrived here by following Thunderbird and wondering why suddenly there is a new developer for the latest U3 version. I suspect politics, and don't want get into that.
I am amazed and delighted at the work you have one on this site, John, and have already begun using your implemenation of thunderbird, on my U3 drive but apart from their structure.
For me, the primary advantages of the U3 concept are the ability to not leave "tracks" on the host machine, the menu structure, and the (hope, at least) that if the drive were lost or stolen it would at least keep a casual snooper out of your files. I wish the "lost password" stuff was not so draconian, and I wish I had more information on how well the device really was protected. As one of the earlier posters commented, the U3 website is very lacking in useful information, and very hard to navigate!

Maybe this belongs in the Development section of this forum, but it seems at least to fit here. What I'd really like is to do is to configure a USB thumb drive so it would be protected against someone else using it or discovering its contents, with a menu shell similar to the Windows start menu but apart from it, that would not leave behind any evidence of its having been used on the host - and would not require being logged in with administrator rights to use it. It should be relatively easy to add ANY program to the menu structure.
I'll continue to see what I can do with PoratbleApps outside of U3. I'm excited about the concept, thanks for this website!

Walt