Not sure if you care, since it's not Ubuntu directly, but Fedora has done this for at least the past 6-12 months. They have since version 9: https://fedorahosted.org/liveusb-creator/

you might be able to use an ubuntu livecd image with it...?

you said you're not in the market for server hardware, but have you considered 1 or 2 generation older stuff?

you can pick up single and dual socket motherboards for well under 200$. 2ghz chips for 50-100$ each(that's a pure guess, they may be even cheaper), 1gb ram sticks for about 10-15$ each.

I've got tyan s2895 and s2892 boards, both work very well with windows or linux, vmware esxi will install without any fuss if you use a sata drive, and, if you so desire, I hear they make a mean hackintosh. my s2895 has 2 2.6ghz chips and 4gb of ram, running about 6 (mostly idle) linux vm's that all feel as responsive as my desktop machine.

you can get opteron 240-246's or higher for pretty decent prices, possibly even dual cores.

the only downside is they run a bit warm.

that, or I'd suggest a core 2 quad. those can run a little warm too, in my experience. your ram and motherboard will be cheaper than the opterons, but I have no idea how they play with osx or vmware.

This is anecdotal, so the standard grain(s) of salt apply, but I feel compelled to reply to this "people out in the country will be even worse off now" meme I see so many of us throw around:

My brother lives out in what most would call the country, he's 1.5-2 hrs southwest of Chicago(at least 45 min S-SW of Joliet), 20 minutes away from the nearest interstate, 5-10 minutes from the nearest "town".

They've got a big directional antenna up next to the house for TV, pointed at the Chicago stations(the next closest broadcasting area is about as far in the other direction, and being more rural doesn't pump out with nearly as much power). They could only get 2 analog stations with any halfway-tolerable picture quality. I'm not talking "no fuzz", I'm talking "the fuzz doesn't bother me enough to turn it off, and I can still make out major facial features".

After getting their digital converter box, they can now get every Chicago station(and the -2, etc alternates/extras), in crystal clear quality. He loves it.

I swore one time that my Windows 95 machine got hosed up, nothing worked right.

this was right after playing a bit of the original Half-life, sometime between 10pm and midnight, after my brother had gone to bed, with nice thick headphones and a pitch-black room. I had hit one part that was startling enough that I jumped, slamming the mouse into the keyboard out of surprise.

strangely, half-life wouldn't work right after that. I quit, and windows wouldn't work right. I rebooted, still nothing.

10-15 minutes of silent cursing and wondering what the hell just happened, I happened to look at my mouse, and see that the 4th button, on the side, the one I had bound to the backspace key in the control panel, seemed to be stuck in "clicked" mode, wedged under the side casing of the mouse.

I pried it out, and magically, windows starting working fine again. half-life too.

that one always makes me smile, how half-life scared me so much that I accidentally "broke" my computer.

this isn't directly related to support, just my personal anecdote about this 2nd-guessing you've explained so well:

A few years back I had a girlfriend. really. and I bought an original xbox because she liked video games.

We were playing some game, Hunter, I believe, because it had a redhead on the cover(take a guess at that one)

as most of us know, sometimes, sometimes quite often, when you kill someone in a video game, they may drop a weapon. and, depending on the game, or the situation in the game, they may not necessarily drop a weapon. either way, this is usually very visible on screen.

well this girl stumbled across a weapon on the ground after killing someone, and then decided she must run over every single killed enemy's body for their weapon, even though she'd only seen this with a very small percentage of the enemies we had killed so far(like maybe 25% at best), and could visually look to know whether or not there was a weapon on the ground anywhere on screen.

despite my going to school for and being employed as a computer programmer, despite my having played hundreds more hours of video games than her, despite clear visual evidence within the game itself, no suggestion, no explanation, no comment of any sort on my part could convince her that only SOME of the characters we killed would actually drop a weapon. She just HAD to check every single dead body for a weapon, not by looking on screen, but by running over their dead body with her character.

needless to say, it made the game take quite a bit longer, and killed any desire I had to play video games with her, or try to carry on any rational semi-intelligent conversation. if you don't have that, man, then you've really got less than nothing when the sex runs out ;-)