My USB's 16 GB, but I only get to use 4 GB in persistence file. Any way to increase it?
Take a look at http://www.pendrivelinux.com/create-a-larger-than-4gb-casper-partition/. The tutorial is for an older version of Ubuntu but works fine for 10.10 and 11.04.
The reason why a separate partition must be created is because the USB creator only makes one partition by default (FAT32 filesystem). Onto that partition it copies the CD or ISO contents and creates a persistence file (ext2 formated) called casper-rw. Since FAT32 can't hold larger then 4GB files the persistence file can't be any larger then 4GB.