We used to do kickstart installs with floppy drives. Simple enough, you write a ks.cfg file to an ext[2-3] formatted floppy disk, boot off your install CD and enter at the boot: prompt:
boot: linux ks=floppy
Lo and behold, servers started showing up without floppy drives, negating the kickstart advantage.
That is until we finally found out how to use a USB thumb drive to accomplish the same thing. Drop the ks.cfg in the root directory of the thumb drive and enter:
boot: linux ks=hd:sda1:/ks.cfg
That's assuming sda1 is your USB device. It could be something different. For instance if you have two internal (logical) raid devices, the device will probably sdc1, and so forth.