The information below was taken from http://www.pendrivelinux.com/
This assumes that your using a linux system, there are instructions if your using windows.
# Insert a 512MB or larger USB thumb drive depending on the size of your CD / iso
# Open up a terminal and type fdisk -l (note which drive is your USB stick)
# Type umount /dev/sdx1 (replacing x with your flash drive letter)
# Type fdisk /dev/sdx (again replacing x with your device)
1. Type p to show the existing partition and d to delete it
2. Type p again to show any remaining partitions (if partitions exist, repeat the previous step to delete them)
3. Type n to make a new partition
4. Type p for primary partition
5. type 1 to make this partition one
6. hit enter to use the default first cylinder
7. hit enter again to use the default last cyl
8. type a to make this partition active
9. type 1 to select partition 1
10. type t to change it's file system
11. type 6 to select the fat16 file system
12. type w to write the new partition table
# Type umount /dev/sdx1 (replacing x with your device) to unmount the partition
# Type mkfs.vfat -F 16 -n usb /dev/sdx1 to format the first partition as fat (replace x with your flash drive)
# Remove and reinsert your USB flash drive
# Type mkdir /tmp/usb
# Type mount /dev/sdx1 /tmp/usb (replace x with your USB drive)
# Type mount /mnt/cdrom (or cdrom2 if you have more than one)
# Type cd /mnt/cdrom (or cdrom2)
** If you don't have granular burned to a cd, there is another option.
1. download the granular iso.
2. type mkdir /mnt/image
3. type mount -o loop <location of your granular iso> /mnt/image
now you can access granular via /mnt/image just like you would if you had the cd.
# Type cd <location of your granular cd>
# Type cp -rf livecd.sqfs isolinux/* /tmp/usb
# Type cd /tmp/usb
# Type mv isolinux.cfg syslinux.cfg
# Type cd
# Type umount /tmp/usb
# Type syslinux -sf /dev/sdx1 (replacing x with your USB device)
# Finally, reboot your computer and set your system BIOS to boot from USB-HDD. Also set the boot priority to boot the USB device first if this option is available.
I have used these above steps to create bootable usb's of:
PCLinuxOS 2007 and 2009
PCLinuxOS Minime and Tinyme