I'm a linux system administrator and dealing with big iron distributions like debian and redhat for a long time. I need a recommendation for a small distribution which I can install to USB flash disk. I need a general purpose distribution with an up-to-date kernel (especially ext4 / GPT support is needed) to carry some filesystem operations. Desktop environment is optional. In-Place updates like a real installation is a huge plus (I just don't want to reinstall it with every major version).
Check out Grml, to quote from their page:
Grml is a bootable live system based on Debian. Grml includes a collection of GNU/Linux software especially for system administrators. Users don't have to install anything on fixed storage. Grml is especially well suited for administrative tasks like installation, deployment and system rescue.
Grml provides tools and images for installation to a USB device. It also contains an X environment and comes with elaborate default configurations for a lot of text tools (zsh, screen etc.).
There are several documented ways for customizing default Grml USB-images, depending on the use case (remastering, adding packages, starting extra services, configuring sshd keys etc.).
As an advantage to Arch Linux, Grml uses binary packages, i.e. you don't have to compile source packages all the time. Since it is a Debian based distribution, it uses the
dpkg system, including the
apt-get package manager, which is powerful and ultra fast.
I highly recommend Arch Linux as a first candidate. It is a very minimal, bleeding edge distribution based on rolling releases and provides the user huge flexibility to build the system to his/hers needs. Rolling release means there are no major release versions and packages are updated straight from the repos as they are packaged from upstream. This gives you the latest packages and features to play around with, like
ext4. Arch Linux also uses a so called Arch User Repository (AUR), for not-official packages that can be packaged and maintained by the community. Here you can find alot of new, experimental stuff you won't find in the official repos.
The installer is as minimal as it gets, providing only the basic set of packages and drivers required to run and setup the system - the user is left with the freedom, hence also the responsibility for tailoring the system freely. However this is made dead easy with the excellent Arch Linux package manager
pacman. Learn how to use it and maintaining your system is fun!
You can install the arch install ISO right to your USB stick with something like:
# dd if=/path/to/archlinux.iso of=/dev/sd[x]
Make sure your /dev/sd[x] is unmonted before performing the command. If I misunderstood your question, and that you wanted to run Linux from USB, please check out: https://wiki.archlinux.org/index.php/Usb_install