I found a solution: after the installer demands the CD-ROM, take the USB out of the port and then reinsert it. Scan again for the CD-ROM and the USB drive will be recognized. The installation then continued without problems.
I am unable to install Kali 2016.2 using a USB. The installation demands a CD-ROM. This cannot be right... Right?
EDIT: Kali Linux 64 bit (25cc6d53a8bd8886fcb468eb4fbb4cdfac895c65) ISO used together with Universal-USB-Installer-18.104.22.168
I am using a separate SSD installed in a DVD-drive caddy, and I would like to install Kali on this drive. This is because I want to continue to have the option to use Windows on this laptop, but I do not want to lose space by creating a partition. So I do not have a free CD-ROM drive to install with unless I take out the primary internal drive and this seems like a lot of faffing about to do at 5am when a USB boot would be so much more convenient.
I boot from the USB and choose the option to perform a graphical installation. However, less than a minute into the installation process, I am told I need a CDROM to continue installation. No CDROM is found since it is a caddy, and so I have to abort the installation.
Is there any way to work around this so that I can have a separate caddy SSD with Kali?
UPDATE: I have tried running the installation from the USB as a non graphical install; I get the same error. It reads:
'Your installation CD-ROM couldn't be mounted. This probably means the CD-ROM was not in the drive. If so you can insert it and try again.'
Surely I should be able to easily install from a USB in 2016 - half of notebooks these days do not even have CD drives. What am I doing wrong??