Crazy to think you'd do this if you already had 1GB RAM - but many people still have 256MB RAM computers and don't need to throw money away upgrading hardware when they can use a better OS. On Vista, Ready boost is a bit of a joke - they wrote 40 million lines of code to bloat your computer, and take up all your RAM, and include an option to make the operating system fill up RAM and then start using USB memory devices.
Using flash as RAM is rather slower than adding RAM though - and it's certainly a pointless gimmick with Vista... Maximum data transfer rate on a memory stick 24-30mb/s MAX!!! Even with fairly old hard drives the data transfer rate is never this slow - so you'd be better letting your existing SWAP partition do the work.
You can try it, but you must be sure that the stick is very fast - that means maybe more expensive than RAM would cost - and realise that flash memory will suffer if it's heavily used as a swap area with lots of read/writes.
You would do better to stop running gnome desktop and try something lighter - OpenBox is getting very popular now, I used it when I installed on my friend's eeePC - and it's a lot faster than XP I can tell you ;) Take a look at Crunchbang linux (it's not easy, but if you boot it you'll see speed).
Ubuntu normally uses a 'SWAP' partition already which functions to help moving files too big to fit in RAM and avoid fragmentation with the filesystem, so if you can't get your desktop to load, you should mount your memory stick as a SWAP area - you can do that a bit like this (assuming it is mounted as 'disk':
dd if=/dev/zero of=swap bs=1M count=200
If you're getting your desktop, then you can run Partition Editor - and use that to partition your flashdrive and set it as a SWAP partition. Couldn't be simpler ;)
That's it - whenever RAM is short, it's going to use your stick instead. Make sure you have a very fast stick, it's going to be a lot slower than RAM, but quicker than scraping on the hard disk for sure.