You can create your database on the usb flash drive. That is nothing different from other data connection, only the location. Another method, you can access and update you data using ADO.NET on your local drive. Back up the database one day or one week to you usb flash drive or copy the backup file to the drive.
More information:
Retrieving and Modifying Data in ADO.NET
http://msdn.microsoft.com/en-us/library/ms254937.aspx
Backing Up and Restoring Databases in SQL Server
http://msdn.microsoft.com/en-us/library/ms187048.aspx
backup SQL Server database using Windows Form
http://social.msdn.microsoft.com/Forums/en-US/sqlnetfx/thread/bf5311b3-c45e-4729-9012-3ae1e4105569
Beginners guide to accessing SQL Server through C#
http://www.codeproject.com/KB/database/sql_in_csharp.aspx
How To Update a SQL Server Database by Using the SqlDataAdapter Object in Visual C# .NET
http://support.microsoft.com/kb/308507/en-us
Best regards,
Ling Wang
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