There are two ways to create a bootable XBMC Live USB disk using Windows:
1. Use Virtualbox
With the latest Virtualbox you can boot from the ISO image and access an USB disk mounted on the host computer.
2. Use Unetbootin
Start unetbootin, select disk image and choose the file XBMCLive.ISO.
Once the process is finished open the file syslinux.cfg on the flash disk and replace all occurrences of "boot=cd" with "boot=usb".
Due to the lack of the required tools in Windows, unetbootin cannot create the "permanent storage file", ie the flash disk will start in read-only mode.
If you want to have a permanent system storage boot the flash disk in safe mode, logon at console prompt and type:
Code:
sudo mount -t vfat /dev/sda1 /mnt
dd if=/dev/zero of=/mnt/ext3fs.img bs=1M count=600
mkfs.ext3 -F /mnt/ext3fs.img
(replace 600 with your preferred size in MB).
After a reboot you will have a complete XBMC Live bootable disk.