1. Plug in your USB drive. Backup all the data in the USB drive.
2. Insert your Snow Leopard Installer DVD into the DVD-ROM.
3. Go to Utility -> Disk Utility. You should see the USB drive and the SL installer DVD entries on the left pane.
4. Select the USB drive. On the right pane, click on the Partition tab.
5. Here are few things that you need to do:
- Under the Volume Scheme, select ’1 Partition‘ from the dropdown
- At the Name input field, enter a new name for the partition (I choose to give it the same name as the SL installer DVD).
- At the Format field, select Mac OS Extended (Journaled) from the dropdown.
At the bottom, click on the Options button.
Select GUID partition table.
Click Apply. This will repartition and reformat the USB drive.
6. Once it is done, click on the Restore tab. You will see two input field: Source and Destination.
Drag the SL Installer DVD entry to the Source field.
Drag the newly formatted USB entry to the Destination field.
This will copy the image from the DVD Installer to the USB drive. You can go for a coffee break now as the whole process takes about 30 mins.
When the whole process is done, you will be able to boot and install Snow Leopard from the USB drive.
To boot your Mac from USB, you just need to select the respective entry in System Preferences -> Startup Disk.