Making a kali-linux persistent usb with 1.08 is different from previous versions. You can read the kali.org approach and/or you can try our method. Each has its strengths. Here is how Musket Teams do it
1. Install kali-linux 1.08 on to the usb flash drive using XP and Win32DiskImager.exe. Make sure Win32DiskImager is pointed at your usb flash drive. When you browse to the location of your Kali-linux 1.08.iso, change the "Files of Type" from "img" to *.* - select the down arrow accross from "Files of Type" and you will get this selection in a drop-down menu. Once selected the kali-linux.iso file will appear. Select it and select "write" then sit back and wait while the diskimager does it's work. When fiished you now have a live version of Kali-linux. Boot the computer from the kali-linux 1.08 usb flash drive and test to see if it is working properly then shut it down.
To enable persistence so your work is saved between reboots do the following;
2. Run up a kali or Backtrack operating system with gparted installed. You cannot use the usb with kali-linux 1.08 on it as it will be locked during these operations, therefore a separate operating system must act on the usb flash drive.
3. Insert the usb with kali-linux 1.08 installed in the computer running a linux distro with gparted
4. Type gparted /dev/sdb
5. You will find /dev/sdb1
/dev/sdb2
unallocated area
6. Right Click within the unallocated section, then select new from the drop-down menu that appears.
7. Create a Primary Partition, Choose ext 4 as the file system, and label the partition with the word:
persistence
8. Click on "Add" then "Apply" and let the computer format the partition in ext 4 with the label persistence.
9. When the process is completed open up a terminal window and enter the following:
For unencrypted
mkdir -p /mnt/my_usb
mount /dev/sdb3 /mnt/my_usb
echo "/ union" > /mnt/my_usb/persistence.conf
umount /dev/sdb3
========End of Unencrypted===========
For an encrypted partition
cryptsetup --verbose --verify-passphrase luksFormat /dev/sdb3
cryptsetup luksOpen /dev/sdb3 my_usb
mkfs.ext4 -L persistence /dev/mapper/my_usb
e2label /dev/mapper/my_usb persistence
mkdir -p /mnt/my_usb
mount /dev/mapper/my_usb /mnt/my_usb
echo "/ union" > /mnt/my_usb/persistence.conf
umount /dev/mapper/my_usb
cryptsetup luksClose /dev/mapper/my_usb
========End of encrypted===========
10. Shut down and reboot from the usb flash drive with kali-linux 1.08 installed When the kali-linux main menu appears select Live USB Persistence or Live USB Encrypted Persistence as installed.
11. To test that persistence is functioning open leaf pad and write a text file and save it to root. Use the terminal window and type ls and make sure the file was saved then reboot the computer, Select Live USB Persistence or Live USB Encrypted Persistence as installed and see if the text file you just saved appears. If the text file you saved is still there the persistence feature is working
12. If persistence is not working, start at item 2 again and work forward. You do not need to reinstall Kali Linux 1.08.
