Hi, Nadav -
This Apple KBase article addresses that -
Article #TA25908 - USB Info and Benefits of Dual-Channel USB
Machines which qualify and are OS 9 bootable can boot to a USB drive using OS 9. Early versions of OSX, at least up through OSX 10.3, are not USB bootable regardless of machine capability. Not sure about later versions of OSX - as Tom indicated, it may also require that the machine be an Intel-based one.
Booting to USB is not a good idea, though, except perhaps in an emergency when there is no other choice. All machines which are OS 9 bootable have a USB 1.1 port - this is just too slow for any real use of an OS. USB 2.0 does not appear on machines until the G5 models, and even USB 2.0 is slower than firewire 400 for sustained use.
Given that all OS 9 bootable machines which are USB bootable have a firewire 400 port and are also firewire bootable, use of a firewire drive is far better. Getting a small firewire drive (the little pocket-size ones work well and are not expensive) and placing a universal (boot any Mac) install of OS 9 on it will allow the drive to be used to boot any qualifying Mac.
Article #HT2699 - FireWire Booting