4GB should be enough for the default setup image. Using a process very similar to the one documented in the tutorial posted by Sakkura, my USB device has 3.66GB occupied by the
Windows 8.1 Preview.
Installing from an SD card is dependent on driver support throughout the installation process. For example, if the card reader is USB 3.0 based, the tutorial previously posted will not work. This is due to the
Windows Preinstallation Environment (Windows PE) created by the Windows 7 USB/DVD Download Tool, which is based on Windows 7 and does not include USB 3.0 support.
To install from a USB 3.0 device, either a card reader or a USB stick, Windows PE 4.0 or greater is required. You could create USB installation media from the Install Windows 8 button on the page
Upgrade to Windows 8 with only a product key, provided you have a compatible product key.
Alternatively, you could install the
Windows Assessment and Deployment Kit (Windows ADK) and the
Microsoft Deployment Toolkit (MDT) to facilitate creation of deployment media which can be used with USB, optical disk, and even over the network. MDT also provides for automatic installation of drivers and integration of those drivers in the WinPE environment, automated installation of applications, and much more. These free tools are recommended in scenarios requiring multiple installations, such as deployments to a group of systems, or testing environments where fresh installation of environments is frequently required.