Virtualbox doesn't like it and it seizes up even caused me to force shutdown a couple times tired of restarting and would like a side by side using Ubuntu 12.04
closed as off topic by Javier Rivera, izx, jokerdino♦, Jorge Castro, RolandiXor♦ Aug 23 '12 at 2:04
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Since a USB flash drive is just a hard disk, you should be able create bootable usb drive with both windows and ubuntu.
In principle, it should be the same as making a normal dual boot setup Dual boot guide
NOTE: I haven't tried this myself.