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Howtogeek posted a tutorial about creating a persistent, bootable, and virtualized Linux USB Drive with LiLi



Live Linux USB drives are often the go-to tool for virus removal and file recovery, but what if you want to install software on your drive without rebooting? Heres how with the LinuxLive (LiLi) USB Creator.
We have shown you how to create a bootable Linux flash drive in the past, and even how to do it directly from an existing ISO. These methods still work great, but if you want added features like drive persistence and the ability to open your Linux OS under Windows with Virtualbox,
  Create a Persistent, Bootable, and Virtualized Linux USB Drive with LiLi