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Download the dsl-embedded zipfile
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Create a FAT16 partition on the pendrive. Mount it.
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Unzip the dsl-embedded.zip file onto this.
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Unmount the pendrive
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run "syslinux -s /dev/sdX1" (without the quotes) to make it bootable.
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You can now boot via QEMU (from within Linux or windows), OR as native
from the USB drive.
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You can also run DSL from a GRUB bootloader menu on your USB key. This is
very useful if you're using DSL as part of a data/system rescue toolkit,
as you can include multiple preset configurations of DSL as well as other
utilities.
Note: syslinux needs the package "mcopy" included in the package "mtools".
Note: Unfortunately, this method does NOT give a 50MB Linux Distribution
because qemu dir and method is (comparatively) big. You will end up with a
110MB distribution.