Inspired by www.utorrent.com/featured/utorrent-for-usb, which is just awesome, I thought I'd staple together my own with a spare drive I had no other use for.
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Step 1: Make It Pretty
To start, I used an old 1 gig Cruzer that I'd found in the pocket of a jacket I hadn't worn in months. Since I was at the game shop anyhow, I abused their free paints for the task. I primed it with Skull White, then covered that with a layer of Goblin Green, and painted the 'u' icon with the Skull White. After that, I put on a few layers of clearcoat. Shiny!
Step 2: Make It Work!
While it was drying, I set up the actual uTorrent client in a folder and plotted out my folder structure.
/bin - utorrent.exe and a blank settings.dat
/torrents - storage for all .torrent files
/incomplete - incomplete downloads
/finished - complete downloads
I dropped a suitable icon file in /bin and edited my autorun.inf to point to it.
Step 3: IT LIVES
After the clearcoat dried, I copied my folders over to the drive, and she's all set!