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Of course, it requires you to format it as HFS/HFS+. And the Mac must support USB booting (only Macs with AGP graphics can boot from USB, and they must have the latest firmware to do it).
I should have spelled it out. I have a PowerMac G4 400 Gigabit with AGP, OS 9.2.2, USB 1.1. When I upgrade, I'll have USB 2. Thanks for telling me how I should format it.