The Setup: I got NASLite USB v2.02 three days ago and installed it without a hitch on a Shuttle AN35N mobo. For start, I only attached a 300G Samsung PATA HD on the primary IDE channel as master. I also have a CD-ROM attached to the secondary IDE channel as master.
The Problem: When I built the setup, the only USB drive I have is this 1GB drive.
http://www.buy.com/retail/product.asp?loc=101&sku=202434195. Since only 7MB is used, I didn't want to waste all that capacity. So, I bought a 256MB Memorex Travel Drive.
http://www.superwarehouse.com/Memorex_TravelDrive_256_MB_Flash_Drive/32509025/p/623771. I don't have problem using the utility program to create the bootable USB drive, but, the system won't boot
as long as the HD is attached!. If I remove the HD, then the system boots. But, without HD, that defeats the purpose of NAS.
I tried to move the drive to different IDE channel and slot. I tried new cables. I tried configuration with and without CD-ROM. The bottom line is that as long as the HD is attached anywhere to the system, the system won't boot. The screen simply says "Boot Error".
Further Attempts: I borrowed a 128MB USB stick from a friend. It is a promotion item so I don't know what brand it is. But, it behaves just like the 256MB Memorex Travel Drive. Then I borrowed another friend's 128MB Lexar JumpDrive Secure
http://lexar.com/jumpdrive/jd_secure.html. Same thing! In all 3 cases, I don't have any problem configure and boot the USB drives, including getting unlock code,
if and only if I don't attach the HD.
This problem has been bugging me for the past 2 days. I can still use the system with the 1G USB drive. But, it bugs me that I can't use any other USB drives in my posession. I just want to know why

Is there hardware difference between USB drives? Why would the presence of HD cause boot failure
