I am installing one blade to USB right now. When I look in the boot order, it treats the USB key as a hard disk, and it automagically showed up under the hard drive boot order item so this should just work with no special configuration needed. Just be careful that if something is not configured through UCSM, UCSM won't have any knoweldge of it and you will not be able to tell it is booting from USB instead of from hard disk in the GUI. Also I use those tiny USB keys that only stick out about 2 mm at home and they work fine in rackmounts. In blades the key has to be straight and no longer than maybe 2-3 inches or it will be resting on components on the motherboard. Additionally if it is much wider than the usb connector in any direction it will not fit as there are parts of the blade that would be in the way.
Here is an example (with pictures) of the one I use at home in C240m3 rackmounts, but they are much cheaper if you only get the 8 GB or 16 GB versions. I got these since its a home server and having a failure even once a year due to a USB key dying is not a problem for me and I can also use these same USB keys in some other servers for installing Linux to USB since it has plenty of space:
http://www.newegg.com/Product/Product.aspx?Item=9SIA12K0F13305
Also, I believe theres some improvements in ESXi 5.1 for APD scenarios on the boot LUN which might help if your USB key dies after a few years since the keys you buy from Computer stores down the street are usually just a normal MLC, or maybe even TLC USB key with no redundancy and will eventually die. It might be a good idea to keep spare USB keys around, or even swap the USB key every year or two to avoid having it die at an inconvienant time. In ESXi 4.1 the host would usually work for a few weeks at least without the boot LUN, but without HA it eventually would get into a pretty bad state where all your VM's were still locked by the dead Host, while the Host was unreachable from vCenter or even a direct connection with vSphere client and the only way to fix it was to power off the host and then manually re-import all the VMs other hosts through vCenter or wait for that host to finish rebooting.
If you want a more relaible USB key, you would need to make sure it is based on SLC flash, not MLC or even worse TLC since SLC flash will last ~10x as long, but also cost a few times more. This can be worked around if the flash drive had wear leveling technology, but most do not.
This is the first SLC USB key I could find in a quick Google search, and it is not that much cheaper than the Cisco USB key, but maybe you can find a smaller one somewhere else for cheaper:
http://www.mydigitaldiscount.com/mx-technology-16gb-usb-3.0-mx-es-series-slc-flash-drive-mxub3ses-16g/
If you find a cheap one somewhere, please let me know so I can buy some.
Here is one place you can just buy the Cisco USB key to add to the server:
http://www.cdwg.com/shop/search/Data-Storage-Products/Flash-Memory/USB-Thumb-Drives/Cisco-Systems/Cisco-Unified-Computing-D/result.aspx?w=TC2&b=CIS.CS5&SortBy=TopSellers
The description on that site says its just for rackmounts, but the part number is for all M3 servers, just make sure it has the -S- in the part number to indicate its the short version.
