I've used it to create a system image of a Windows 7 HDD partition, boot from the repair disk and restore the image to an SSD - it worked perfectly with no problems.
I burned the repair disk to and booted from a DVD - I'm not aware of any option to burn it to a USB drive. I made the backup itself on an external WD USB drive. I expect that any USB drive would work fine.
Thanks much - I used it to create a system image as well as a backup of my files. Hopefully i won't have to use it.