I recently got a sandisk 128MB USB flash disk and I've decided to use it as my CVS repository (or arch, I'm looking into that, or svn, I'll look into that after I look at arch). I shuttle between multiple sites, and they're not all on the internet. Some of them are completely firewalled off from the world.
I don't share the repository with anyone, so there's no problem keeping it in usb. Of course that wouldn't work well for a team. But for me, well, I just like having all my code, editing history, and releases in a repository, so a USB disk is fine as a repository.
The only thing I'm worried about is the write cycle. Need to research on that. Some flash memories are supposed to have only a limited number of write cycles and beyond that limit it's not possible to write to the device anymore.