OS X on USB key for netbook? I give up.

Yes, I've given up on this as there's just no promising signs at all.
OS X booted from my 10-year-old 160 GB HDD works fine on my EeePC 901. I suppose a slightly faster operating speed might result from a more modern external drive, but do I really need it?
I don't think so as I really just embarked on this to see if it was possible.
Today, I tried to install OS X directly onto my new 16 GB key using the guide that worked well installing to the external drive.
However, as I only have a Snow Leopard upgrade DVD (not for complete install), I first had to install a pretty half-baked version of Snow Leopard I downloaded from the internet (cough!).
However, it did work for me on the external drive as it allowed me to subsequently use the upgrade DVD.
But, this didn't work on the usb key. I kept getting the message "OS X cannot be installed on this disk".

Not only that but the usb key with Chameleon and the downloaded SL installed behaved very strangely. When plugged into my Mac, nearly everything I did produced the beachball of death.
Also, I had difficulty using Disk Utility to re-partition the key as it refused to unmount. Eventually got over this by erasing the key first although even this required two or three attempts.

Just for curiosity, I installed LinuxMint (not the LiveCD but the real thing) on the 16 GB key to see how it would fare in comparison to the painfully slow OS X install on the same key.
Well, on the Dell E520 it performed exceptionally well although it was noticeably slower than the HDD on that machine. Everything worked including 3D effects and Unity.
I used both hdparm and ther Disk Utility on the Dell to measure the Sequential Read rates on both the key and the HDD (Write speed not measurable because of disk partitioning nor were Random reads available).
The key gave me 29-33 MB/s while the HDD measured 62 MB/s.

The equivalent figure for the same key when OS X with GPT partitioning was installed was 12 MB/s. However, it's not clear to me why the file system or partitioning scheme used should influence so profoundly the key's read-write performance.

Anybody know better? Please comment.