Using the instructions I found on the documentation site, and a bit of advice from a helpful blog I found, I've been able to install Kali 1.0.4 to a Thumb Drive with encryption and persistence.

I'm having a bit of a strange problem I can't identify. When I try to boot into my newly created thumb drive from startup, as I've been able to with all my other Kali installations, I hang at

GRUB loading.
Welcome to GRUB!

However when I start up a VM running Plob Boot Manager, then select boot from USB, I'm able run Kali perfectly.
Does anybody have any ideas?