I am working on building a good Ubuntu Live ATI ISO file today in an attempt to eliminate all of the hard drives by using USB thumb drives, that'll save on electricity as well as hardware costs going forward.
I'm actually doing the same right now. How far along are you with it? I'm stripping it down to use openbox wm and using 12.10 w/ 3.8.2 kernel. Having it set up to load into ram so that I can pull the stick and boot another machine. Also apache and psql with a web interface so you can log in over LAN and check status. The web interface is whats taking most of the time though. But at least it will be responsive so i can check it on my phone if i decide to open ports on my router. PM me if you wanna compare notes.