cdroms are slow, don't allow to modify their content easily, they are weak and not as easy to carry as USB keys.
It would be great to provide Ubuntu as a liveUSB just as Mandriva does. We should be able to carry our distribution on any computer, manage our preferred settings (do I want binary drivers enabled ? what is my preferred resolution ?), etc.
The thing is not to make something transportable, but really a nomad system that could be used just the best way as it could on any computer.
Developer comments
I've changed the title from "LiveUSB instead of LiveCD" to just "LiveUSB". Simplifying the creation of USB versions is a good idea, but it doesn't need to replace CDs just yet.
A tool to turn a USB disk into a bootable Ubuntu live image is planned for Ubuntu 8.10.