Created USB using Universal-USB-Installer-1.8.3.7.exe and ubuntu-10.04.2-desktop-i386.iso.

Edited /syslinux/text.cfg on USB as follows:
default live
label live
menu label ^Run Ubuntu from this USB
kernel /casper/vmlinuz
append noprompt cdrom-detect/try-usb=true persistent file=/cdrom/preseed/ubuntu.seed boot=casper initrd=/casper/initrd.lz splash --
label live-nvidia
menu label Run Ubuntu (NVidia)
kernel /casper/vmlinuz
append noprompt cdrom-detect/try-usb=true persistent file=/cdrom/preseed/ubuntu.seed boot=casper initrd=/casper/initrd.lz nomodeset --
label live-vesa
menu label Run Ubuntu (VESA)
kernel /casper/vmlinuz
append noprompt cdrom-detect/try-usb=true persistent file=/cdrom/preseed/ubuntu.seed boot=casper initrd=/casper/initrd.lz xforcevesa --
label live-install
menu label ^Install Ubuntu on a Hard Disk
kernel /casper/vmlinuz
append cdrom-detect/try-usb=true file=/cdrom/preseed/ubuntu.seed boot=casper only-ubiquity initrd=/casper/initrd.lz splash --
label memtest
menu label Test ^memory
kernel /install/mt86plus
label hd
menu label ^Boot from first hard disk
localboot 0x80