Information on troubleshooting USB Boot is available in the xpehelp.chm file shipped with Feature Pack 2007 RTM. Here is some additional information on the subject.
1) Always safely eject your USB DOK after using the UDFPREP utility, and after coping your image to your USB-DOK
HORM does not stand for “Ham On Rye (with) Mayonnaise”. It is an acronym for “Hibernate Once Resume Many���. Why would you want to “hibernate once, resume many”, you ask? Well….allow me to tell you.
This feature allows a rapid reboot and return to the same hibernated image over and over again. Much different from the way you typically use hibernate mode on shut down with your desktop. With your desktop non-XP embedded operating system, you can only restore the image you hibernated last and hibernated images do not persist across reboots. If you want to return to the same image after a rapid reboot on your device, your choice is HORM.
HORM works with EWF (Enhanced Write Filter). This feature is not new to XP Embedded operating system and was introduced in SP2. We did not change the functionality of HORM in FP2007. We changed the way HORM is activated and enabled. For HORM to work, you had to manually create a file in the root directory. To disable HORM, you had to disable EWF, reboot (for EWF disable to take effect), delete the file, reboot (for resume from hibernation to get clear), enable EWF and reboot again (for EWF enable to take effect).