All right. I think i figured out my issue using Damn Small Linux on my pendrive. I can't get the Qemu virtual harddrive to format and mount. if i enter
mke2fs /dev/hdb
and select "y" when asked if i'm sure i want to format the device i get the output of, basically, "Not available, couldn't find size of device."

This leaves me to wonder, can I set a persistent loop using the terminal (with the DSL embedded package?)? would the persistent loop require a VHD? this is basically my last shot, unless somebody wants to troubleshoot with me (i'll also try a different flash drive, like my 1G Sandisk Cruzer, tomorrow). Also, somewhat odd, i got to this site, logged in to make this post, but Dillo didn't even have my cookies on record.

UPDATE 9.16.08: Tried different drive. didn't work. same issue, but it might be Qemu not making the VHD properly (need to figure that out)