Sources: 
http://www.youtube.com/watch?v=27V2jFubDag (Creating live usb)
http://www.linuxbsdos.com/2011/05/04/manual-disk-partitioning-guide-for-ubuntu-11-04/ (Manual disk partitioning guide)
Creating live usb 
dd if=/location/of/.iso/file of=/location/of/usb/device bs=1024- Download Ubuntu from here
 - Format the usb drive to NTFS (Use Disk utility)
 - Unmount the usb device (Don't remove it from pc)
 - Use the following command in Linux terminal to copy the .iso file into the usb device
 
- Finding /location/of/usb/device
 - Remove the usb drive
 - Type cd /dev in Terminal
 - Type ls
 - Plug in usb device
 - Again type ls
 - Now it will display the usb device's location (Eg: If two extra items sdc and sdc1 are displayed in the second case /location/of/usb/device = /dev/sdc (and NOT /dev/sdc1). See the example below
 
Installation
- Restart the system and enter BIOS (press F1 or F2 or F10 or Del or Esc (different for different computers))
 - Go to Boot menu and set the boot preference such that usb divice (USB HDD) comes gets the first priority
 - Exit BIOS saving the changes and reboot with the usb device plugged in
 - Now the boot will be done from usb device and you can install Ubuntu
 
- Please visit the second link listed in Sources above
 - Sample partition for a 250 GB harddrive:
 - /boot : 300 MB
 - swap : 1998 MB
 - / : 7998 MB
 - /home : 245704 MB