1. Format your pendrive
2. Use SYSLINUX 3.63 to make pendrive bootable:
go to the syslinux folder in command line, and type:
syslinux.exe -s -a -m k:
where k: is the drive letter of YOUR pendrive.
Copying the installation files
1. Copy all the files (including hidden files!) from ubuntu install CD to pendrive.
2. Rename the isolinux directory to syslinux and rename the file isolinux.cfg inside this directory to syslinux.cfg .
Boot from pendrive
1. Adjust your BIOS settings to boot from pendrive.
1. Click install in the live-cd. Follow the instructions.