Transcend USB ??

[clausp]

The motherboard (Tyan S2707) is not the problem because booting dss lite from an usb pen works very well.

[crankbos]

I am using the Transcend 1 GB ( blue) for a couple of installs on Gigabyte boards
and haven't had any issues.
I did have issues with an older Intel board with 768Mb Ram for testing ( had adaptes SCSi card too)
I would reformat the usb and make sure you are getting the final stage of the usb install
when it prompts to "make usb bootable"
Are you at the min requirments