cant install 10.04 with USB flash as only drive

I am trying to build cheap internet ready systems from old parts that I can sell for $30-50. My system boards support boot from USB and with flash drive only installed Identifies it as 'Hard drive 0' but I have not been able to make Ubuntu 10.04 LTS boot from it either by installing on it or by creating a "startup disk". I think it may be that I just don't know where to go from where it leaves me.
 "startup disk" starts the same way as the CD with a line beginning 'SYSLINUX' and ending 'boot:' with the flashing cursor. I don't know what it wants.
  I installed using the routine included on the liveCD using the entire USB flahe drive as if it were a hard drive. On boot up I get 2 lines:
Error: end of disk.
Grub rescue>
  Again, I don't know where to go from there. If the bios sees it as a hard drive cant Ubuntu treat it as just another hard drive??