ColinApplegate
Following these steps, literally, step by step, from https://help.ubuntu.com/community/LiveCDCustomizationFromScratch I have get to mount /proc and then receive: root@Colin-PC:/# mount /proc warning: can't open /etc/mtab: No such file or directory mount: can't find /proc in /etc/fstab or /etc/mtab root@Colin-PC:/# mount /sys warning: can't open /etc/mtab: No such file or directory mount: can't find /sys in /etc/fstab or /etc/mtab
The next command succeeds. On I go. I have made it successfully to the section, "Graphical installer, optional step" I will proceed with this step as I see potential value in this feature. Upon apt-get install ubiquity-frontend-gtk, after package installation, I was prompted for "Linux command line" for configuring grub-pc. I haven't the faintest clue what to put here. Leaving it blank. The next screen for grub-pc prompts for kernel parameters, two are given. quiet and splash. Makes sense. I'd imagine what I left blank was expecting kernel /boot/vmlinuz-kernelversion or something of the like. About to find out 
I have been using Linux since I was in the 7th grade. I took Linux up seriously in my high school years at Yorktown High School's Computer Science class, taught by JeffreyElkner.
I first heard of Ubuntu in January of 2005. I have since installed Ubuntu on all my boxes. I attended Ubuntu Down Under in Sydney, Australia.
I will participate on Ubuntu's DCTeam and actively help to pioneer the creation of Edubuntu.
Documentation on making a modified version of Sugar on a Stick per Jeff Elkner's specifications:
First, download Sugar on a Stick from: http://wiki.sugarlabs.org/go/Sugar_on_a_Stick#Download_locations
Mount the ISO readwrite by creating a new directory, eg, /home/colin/newiso, then sudo mount -o loop -t iso9660 /home/colin/Desktop/soas-strawberry.iso /home/colin/newiso You now have readwrite access to that ISO image and can modify it as you please.
Creating a Live USB Customized Ubuntu 9.04 stick:
Acquire boot.img.gz from: http://colin.isa-geek.net:8081/boot.img.gz This contains the initial VFAT filesystem with the kernel, initrd, etc, syslinux, etc. All essential to the boot process.
Plug in your usb drive
Unmount the usb drive: type umount /dev/sxx1 (or whatever device your pen drive is).
say you downloaded boot.img.gz to /home/jeff/Downloads, perform cd /home/jeff/Downloads
MAKE THE VFAT FILESYSTEM FIRST on /dev/sxx1 or you will be limited to 782M (as if you typed mkfs.vfat /dev/sxx) as that is the partition table setup of boot.img.gz
Type sudo zcat boot.img.gz > /dev/sxx1 (this will extract the contents of boot.img.gz onto the usb stick), enabling you to boot off the USB drive.
If you get a permission denied message when you try this, type: sudo chmod 666 /dev/sxx1 and then type sudo zcat boot.img.gz > /dev/sxx1 (that should remedy the problem.)
Unplug and plug USB drive back in. This will cause usb stick to mount automatically. If not, mount it manually, via sudo mount /dev/sxx1 /mountpoint
Now, we have a USB drive formatted as VFAT, we need to copy the root filesystem recursively with the flags -R and -L for cp to ensure proper duplication of the filesystem of the modified Ubuntu distribution. I highly recommend using VirtualBox to create the modified Ubuntu distribution as that provides you with a clean Ubuntu 9.04 install or using a small 20gb partition that you can triple boot to for a clean workspace. Therefore, you can modify the distribution as you wish without any additional bloatware that you do not want.
I have found that after you sudo zcat boot.img.gz > /dev/sxx1 the partition size is only 782M! That's not nearly enough for the whole Ubuntu filesystem to fit! So instead, I wiped /dev/sxx and used mkfs.vfat on /dev/sxx1 to ensure full usage of the space available and re-ran sudo zcat boot.img.gz Then I performed cp -R -L /copy(the root filesystem) /chroot/(the usb drive)
To best accomplish copying the root filesystem of your converted .vdi (expand) is to mount the .raw image via loopback then chroot into that environment. Example:
Reboot using usb and enjoy!
Now this is how to create a bootable USB image of Ubuntu 9.04. BUT. We want to modify the contents of the ISO image to include GASP, GASP games and geany.