I can see flashdrives being useful for lightweight applications like a web browser. I have
PortableApps installed on a 4GB flash drive. On it, I have Firefox, Thunderbird, Open Office, SSH, etc. on it. Of course, these are Windows only versions. I use it between my home and work PCs which are currently WinXP boxes. I'll, hopefully, be getting a Mac Pro delivered Friday. So, now I need to somehow add a Mac version of Firefox and Thunderbird and which uses the same profile. I have found a portable versions of FF and TB for Mac OS X. I'll see how things go.
For heavyweight apps like Photoshop, Aperture, Premiere, etc, IMO, flash drives are out of the question unliess I am simply using the flashdrive to transfer a few files back and forth.
Enjoy life,
Steven