Comment 7 for bug 916554

You shouldn't have to format the usb stick first. The program writes a raw image to the device, overwriting any partitioning/formatting.

You might try a different usb stick or if you have a Linux system, try raw writing the image from there with "sudo dd bs=4M if=<image file> of=/dev/<usb drive>" (where <image file> is the name of the img, and <usb drive> is the raw drive i.e. /dev/sdb).