http://www.ubuntuforums.org/showthread.php?t=80811
Install Ubuntu v5.10 to USB Drive! Works on Flash Drives and HDDs.
I just installed this, and the tutorial was great. Very easy to follow.
I now have ubuntu on my USB HDD, and a 60GB FAT32 Partition for Shared use between it and Windows Boxes (had to customize the partitions, just resize). I've booted from a couple of machines, and it worked on both. I write this from inside ubuntu.
How does this relate to portable apps? Install wine and you can use many of them. I know have a whole system with me, usable in school as 'Nix or on Windows Boxes.
While probably impractical for many, I still found it kind of spiffy and though I would share it with you fine folks. As for the portable apps, I use ubuntu at school in my 'Nix class with wine and even PSart works, launching wined apps from it. Very Cool!
If you like to try new and sometimes dangerous (to your data) things, , give it a try!
Works on my 1GB Flash Stick and my USB HDD from Western Digital!