I have pretty much followed all the steps you have outlined but my system goes blank after POST as if its not able to find the bootloader.
I am trying to install OE on a usb Drive with the following partitions:
/dev/sdc3 on /media/STORAGE type ext3 (rw,nosuid,nodev,uhelper=udisks)
/dev/sdc2 on /media/BOOT type ext3 (rw,nosuid,nodev,uhelper=udisks)
/dev/sdc1 on /media/seagate type fuseblk (rw,nosuid,nodev,allow_other,blksize=4096,default_permissions)
sdc1 contains all my media and is the first partition on the drive.
I have Ubuntu 10.04 installed on my sys and extlinux present as well.
sudo extlinux --install /media/BOOT ----> results in /media/BOOT/extlinux.sys .. output says sdc2 is bootable
sudo dd if=/path/to/mbr.bin of=/dev/sdc ---> also runs successfully
KERNEl,SYSTEM,extlinux.conf were copied and restarted followed by forced Boot from USB drive.
Not sure if i should be posting this as a separate thread, but any help is much appreciated. thnx
[EDIT: the idea is to plug the drive to a zotac zbox.. of course i can go the usb stick[boot+kernel] way but just wanna try this as well]