Due to a bug in our network devices, we originally had to install our Virtual KACE 2000 on a secondary network.  Because of this, and our abundance of overseas offices and road warriors, I worked with the USB deployment for some time.  My impression from the KACE documentation and discussion with KACE employees is that USB deployment was originally considered a last resort, but I've found it works quite well for several situations.

  Here is an edit of the instructions I created for our helpdesk employees regarding USB deployment:

Flash Drive Creation

Creating the Flash Drive - Part I

• In the KACE 2000, go to the Deployments->System Images tab.
• Open the appropriate image.
• Click on Create bootable USB flash drive image for this System Image
  • A background process will be launched to build the installer for the system image. It will take an hour or two depending on the size of your image.
  • If the image is finished downloading, this page will contain the download link and instructions
• Click on the Boot Environments tab.
• Open the appropriate boot environment.
• Check the box for Create bootable USB flash drive image for this System Image
  • A background process will be launched to build the installer for the KBE image. This should only take a few minutes.
• Once the image has been created, you will be able to click on Download bootable USB flash drive image for this Boot Environment.

Creating the Flash Drive - Part II

• When the KBE image is finished downloading, unzip it. If it is on a server, download it to your local machine.
• Open My Computer and find the drive letter for the target flash drive.
• Open an administrative command prompt.
• Change directories to where you unzipped the KBE image.
• install.exe <USB drive letter>:
  • Note that the colon (:) above is very important. 
• Choose the correct drive from the drop down menu and start
  • This will format the flash drive.
  • If you point it at your hard drive, it will format your hard drive. Check your drive letter.
  • This will likely change the assigned drive letter for the flash drive.
• Download the System Image when it completes building. If it is on a server, download it to your local machine.
• Unzip the System Image with Winzip or 7zip only. The built-in Windows decompress may corrupt an image over 4 GB in size.
• In the administrative command prompt, change directories to where you unzipped the System Image.
• Open My Computer and find the drive letter for the target flash drive. It will likely have changed since being formatted!
• install.bat <USB drive letter>:
  • Again, note that the colon (:) above is very important.
• Allow the System Image to install on the flash drive.
• The USB key is now ready. For a small amount of additional saftey, you can make the files read-only.
  • Open the USB key in explorer.
  • Select all the folders, right-click, and choose properties.
  • Select the Read-Only checkbox and click apply.

Updating or repairing the flash drive image data only (will not update or repair pre-boot / WinPE drivers)

• Open My Computer and find the drive letter for the target flash drive.
• Delete the KACE folder from the flash drive
• Unzip the new System Image with Winzip or 7zip.
  • The built-in Windows decompress will corrupt an image over 4 GB.
• Open an administrative command prompt, and change directories to where you unzipped the System Image.
• Run install.bat <USB drive letter>:
• Allow the System Image to install on the flash drive.

Flash Drive Deployment

Do not use the standard flash drive image on a machine that has no hard drive! You will format the flash drive!

Manual Tasks For USB Deployment

• Installation
• Make sure the computer is plugged in.
• Make sure the computer is attached to the corporate LAN if necessary for pre-install or post-install tasks.
• Plug in the flash drive.
• Turn the computer on, and press F12 to go to the one-time boot menu.
• Choose to boot from USB.
• The computer will boot to the Windows PE environment from the flash drive.
• Wait one or two minutes while the initial automated scripts run, and affirmatively acknowledge the following warning: "This operation may wipe out all data on this machine. Continue?"
• The initial deployment time will depend on the speed of the hardware.
• The computer will then reboot on its own and run Windows setup.
• The computer will reboot again and continue setup.
• Do not, under any circumstances, interrupt this process. If you do, start over.
• The computer will finish post-installation tasks.
• When the computer reboots, it may show warnings about disk and memory size. These can be safely ignored. They are based on the memory and disk size of the original machine that was imaged compared to the new machine.
• This is the first time the end-user can log in. They may transfer their files back to the machine here if it is convenient.
• An administrator should be able to log in remotely at this time.

Troubleshooting / FAQ

Warning: If you attempt to upgrade a system with no hard drive and have a diskpart format pre-install step, you will force the flash drive to self-format!

• How long should I wait?
• If in doubt, just let the process run overnight once you get past "This operation may wipe out all data on this machine. Continue?". It will complete the majority of the installation on its own past this point.
• Try to be patient. The largest factor in this will likely be the drive speed, followed by the ram, processor, and finally the speed of your network connection if pre-install or post-install tasks require the network.
• When starting the process, there are some points in the script where it might take ten or fifteen minutes for the script to continue. I have not seen a machine hang at this point, merely pause.
• If the imaging process pauses for more than 30 minutes while deploying files at the command prompt prior to sysprep at any deployment percentage point, type Ctrl-C and Y to stop the batch file. Then type exit into the command window. The computer should restart. If it does not, hit Ctrl-Alt-Del. Allow the computer to restart, and begin again. There are some large files which create slow points while copying the image files, but they should not take longer than 30 minutes.
• The flash key seems to be corrupt. What do I do?
• Make sure to try the key again, and to try it on a test machine to confirm it is an issue with the key.
• You will need to follow the instructions for Creating the Flash Drive. Typically you will already have the KBE and System Image zip files, so you can proceed from that point.
• Running my imaging process wiped the USB key!  What happened?
  • If you seem to be accidentally formatting the USB drive, you may need to adjust your diskpart instructions.  There are two common reasons to see issues with diskpart and the USB keys.  The first issue is that the CDRom will get in the way.  The second is that you are starting with a single partition, but deploying an image with multiple partitions, so your deployment sees the USB key as the second partition and happily wipes it.  http://support.microsoft.com/kb/300415 has information on the diskpart commands.  Try the following, though you will need to make sure you are creating the right number of paritions, assigning the right drive letters, and using the correct partition sizes (I have to reverse the drive letter assignments).  The idea is to move the CDROM out of the way, and to make sure you have the correct disk selected.

select volume d

assign letter=q

select disk 0

clean

create partition primary size=200

select partition=1

format fs=ntfs quick

active

assign letter=d

select disk 0

create partition primary

select partition=2

format fs=ntfs quick

assign letter=c

exit

• • The other thing I have seen happen is that if you don't have appropriate Windows PE drivers for your hard drive, or if you forget to put a hard drive in the machine, the USB key will be disk 0.  It took me a little while to figure out why my help desk was giving me back "broken" USB keys that had been formatted when they didn't have the disk drive properly connected.
• Does the USB deployment require communication with the KACE 2000?
• No, it should not reach out to your K2k.  It does need a DHCP address so it can start the network connection if part of your install tasks include uploading to the K2K, or downloading files from servers on your network.  It doesn't need to talk to the K2K in order to deploy the image; Windows PE and the image are both installed on the USB key.
• It appears that the image was copied into the folder within my unzipped system image folder on my hard drive rather than onto the USB key?
  • You forgot to end your drive letter designation with a colon.  When you target the deployment you must use a : at the end of the drive letter to designate the drive for the USB key, or it will assume you want to deploy to a folder in the run path.
• Do I need a separate image just for USB deployment?
• I use the same image, pre-install, and post-install tasks for both PXE and USB deployment.  The diskpart script was really the big thing I needed to adjust, and it still works for the PXE deployment as well.  It just had to be more specific where the PXE deployment didn't always need to be.  Obviously, if you connect to networks or devices not available to the machine when you are using the USB deployment as part of pre-install or post-install tasks, those processes will fail.