This is a tool for making custom boot devices from a USB flash drive or other USB or FireWire media, including an iPod. It can import a variety of diagnostic utilities (Disk Warrior, Drive Genius, TechTool Pro and more) from their bootable install discs and configure them for use on the same device. You'll obviously need the appropriate license key to use commercial software.
It's also possible to update the installed software, so there is no need to burn a new disc every time one piece of software gets an update. This version of DasBoot works with 10.5 and up; there is also an older (1.0.3) version available for Tiger.
The only real limitation comes from the inability of PowerPC Macs to boot OS X from a USB drive. If you need to repair both Intel and PowerPC systems, a portable drive with a FireWire 400 (and possibly USB as well) interface is the way to go.
[crarko adds: I've used previous versions of this on both an 80 GB iPod and a small FireWire 400 drive, and it works great. Between this, AppleJack, and Winclone if you use BootCamp, it's easy to build a comprehensive repair and recovery suite. I've had to try to customize similar tools in the Windows world, and it's quite a bit more of a pain in the neck to accomplish.]

