USB booting :: usb intallation

Hello, I'm kinda new to dsl, although a fairly experienced linux user (ubuntu and mainly debian based *Nixes). My question is, what exactly gets installed onto a usb drive when you use dsl's "install to usb pendrive"? Is it a full OS with settings and the ability to write to and save to the usb? Or is it kinda like a live disk? I tried installing, and the installation went off without any errors, but when I try to boot it, it says, "Dumping to a (very limited) shell. Then I have no clue what to do to get it running. Any suggestions? My real intention is to have a full OS on a jump drive, one with all the features a HD install would have, but portable.

it's like a live cd with the ability to write to usb.

maybe it can't find the knoppix image.
is this the only usb device you have plugged in?
it's best to have the device already plugged in when you boot the cd, and then install.

original here.