On Monday, April 09, 2012 12:48:44 PM Konstantin Olchanski wrote:
> (I hope some day the SL installer will learn how to install RPMs from a directory
> instead of from an ISO image. On this happy day we will gain the ability to
> customise the installer by adding and removing packages as we wish, without hassle.

Anaconda used to do this, years ago.  It was a conscious upstream decision to disable 'hard disk' installs from collections of RPM's. See: https://bugzilla.redhat.com/show_bug.cgi?id=435976#c2

> Note that the SL installer installs from a directory full of RPMs when booted from
> the network, but refuses to do so if booted from USB. I guess they are trying to
> be friendly and helpful).

http:// installs do this; the presumption is that, while the hard disk install may not have a properly 'closed' set of packages, the webserver will.  'Closed' in that sentence is in the context of dependency resolution.  Also, loopback mounting the ISO from http:// is a tad difficult, but it is easy with a 'hard disk' install (which is what the USB key really is).

Now, actually using the created USB key has a few caveats as well, but the exact ones depend upon how that key was created.