Well, it didn't work for me. I got an error saying some files were not installed and to use a CD. So I just burned the exact file from the USB drive to a CD and used the CD and it worked fine.
Did you by chance use your USB in a Mac before attempting the upgrade or was it a Mac formatted USB? I've seen some issues there (probably related to all the extra little files Apple writes in if I had to guess), as well as when Mac changes the file suffix rendering it useless until it is renamed properly.
Nope. Don't own a Mac. I used a Barco 4GB USB drive that I've been using for a while now. I've had no problem saving show files on to it. It did see the update file and did attempt to update the OS, but after a minute or two, it stopped. Next release i will try again, but I'll reformat the drive before.