There is no option to run from USB, The menu shows grub 2.0 and the only options available are try without installing and install Ubuntu.The boot menu is UEFI and i'm using the 12.10 x64 version.
I think you are trying to try without installing Ubuntu.
At this screen, press Enter to boot into Ubuntu, without installing.
It will ask to install Ubuntu, but just ignore that.
Before you decide to install, make sure it dectects your Network Card etc.
Edit: Right, so you want to install Ubuntu from the USB to the HDD.
So, at this screen, go down to Install Ubuntu.
Follow the steps, and there you go. Ubuntu on the HDD.
More Edits: Ok, so boot from Ubuntu. Click 'Try Ubuntu'.
On the desktop, there should be a icon saying 'Install Ubuntu'.
If not, search in the Dash.
If not again, you will have to boot into Windows and download the .iso file. Then you launch the .iso and you should be able to install.
Hope this helps!!!
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