Bob Buckland ?:-) shared this with us in
microsoft.public.word.newusers:

The first issue that comes to mind on this is that
MS Office apps place a good deal of their information
into the Windows and Program Files\Common files folder
on the Windows drive, so your USB device may need to
be 'self booting' for Word 2003 to work in that fashion.

The only thing that could work, would be a complete Windows
installation (with Word) on an USB hard drive. Not a memory stick, it's
too small. The hard drive should be bootable AND every pc used must be
able to boot from USB - which is not always the case for a pc more than
2 or 3 years old.

If you really want "your own" operating system with "your own" word
processor to carry around, without leaving any "dust" on computers you
visit, you should try one of the Linux Live CDs. I have used and can
recommend Ubuntu and Knoppix. All of the Live CDs have OpenOffice on
board, which is compatible with Microsoft Office. Most importantly: you
won't have to worry about the license.

Perhaps this is not the answer you expected but if you have some
intellectual integrity, you should try at least one of the Live CDs, so
you can judge for yourself. You might even like it. Or not, but then
you have had the experience and you know from first hand experience
what you are talking about.

Good luck!

--
Amedee Van Gasse