I stumbled upon http://portableapps.com/ a few days ago, and now I have a whole lot of nice applications on my 1GB USB stick. Besides the applications provided by the website, I also have Skype and Photoshop running on my USB stick. After Playing around with the menu a bit, I found a unofficial mod called Portable Apps Menu Mod R31 which is definitely a must for anyone wanting to customize the menu (nice theme support, ability to hide applications from the menu, categories, …). I few minutes ago I even found a theme site for the mentioned menu mod.

I choose Adobe Photoshop 6.0, since it doesn’t really care where it is started from, and is still fairly “small”. Definitely something I’d suggest for anyone with a licence for that version (should be possible to obtain one cheaply since it is pretty outdated).

Skype was a bit more of a challenge to get running off my USB Stick. I followed these instructions to make a batch file to start skype, and used this tool to convert the .bat to a .exec (since the Portable Apps Menu only looks for .exe files)

[Edit]
I just found a “loader” for Ultraedit: http://usb.smithtech.us/apps/index.php This is very cool, since I love this editor, and it has always been a pain to only be able to use it at home.
Another good site for portable applications is http://www.portablefreeware.com