Backup To Thumb Drive

[redfearn]

I have a MacBook Air that of course doesn't have a CD/DVD drive installed. I also don't have the optional external DVD drive. USB Thumb drives are getting bigger and cheaper (16GB for $70), and I would like to create a bootable system on a USB Thumb Drive for maintenance (not backup) purposes. So, I want to include all the basic system software, but exclude applications like iTunes, iPhoto, iWork, etc. I assume it would be possible to fit the OS on a USB drive - maybe even a drive of 8GB or less. Has anyone tried this approach? What size Thumb Drive is needed? (I understand extra space is required for work space.) I assume SD! could do this with scripts excluding directories and files, but thought someone might have some pre-made scripts that would make this work.