Also - interesting point chaos - I also think that considering how much it is used in large organisations that it won't be long until you can install an OS over the internet too. I guess one problem is data retention - don't these usb drives lose data after a certain number of read/writes, and they are also susceptible to power surges etc? A cd, kept in good condition (so no scratches etc) might last longer?
In large organisations we use Norton Ghost or similar for installations. PC's (we used Dell) come from the factory with the bios option to network boot enabled. We install windows, drivers, office and anything else we need on one computer, and use Ghost to take an image of it.
Then you plug in all the PC's, they network boot into a state where the Ghost manager can send them messages. You then Multicast out the install and can have hundreds of computers cloned and ready to be used in about 20 minutes.
This was one of my jobs on my work placement. The whole process only takes about two hours from the start, as long as nothing complicates things (like software that has to be individually activated on each machine ... grrrr)