I found out from here how to integrate VMware with Live CDs. Will this work with Live USbs?
Live usbs as you say are just iso images setup to boot from a usb stick (Mostly copied & the bootloader added.)
In short; you may as well just use an iso image to save the hassle. If you want to do it because you are short on space; copy the iso image to the usb stick and select the iso image on the mounted usb stick as the image.
If your usb stick supports floppy emulation then you can add it as a floppy device and it may work.
Using virtualbox it may be possible to add the usb stick as a virtual disc some how or something like this :
As noted here :
the virtualbox developers can't provide usb booting in the virtualbox bios (Patents I guess.)
As far as vmware goes, maybe someone else knows? It's probably quite similar.
Hey, and if your using Fedora, you might want to try KVM. Their virt-manager makes virtualization really easy. Red Hat now owns Qumranet, the origional KVM company, so, the technology seems to hit Fedora first. Even on 32 bit KVM runs fine for me.