Cool. Portable. Cheap. Can run Quake II. But what does that get you? Still need to plug into a monitor, keyboard, mouse. So you can only use it where those things are. For real portability, how about an SD system thumb drive I can plug into any computer, and it boots as my computer. That would be portable. Useful for a student lab, at my Mom's house, in a hotel. Just a thought.
Linux distributions have been doing this very successfully for the past 9 years (knoppix paved the way, but almost every linux distribution today can run live from a CD/SD/DiskOnKey, and store your data on an SD/DiskOnKey (the same one, if properly partitioned).
And it's unlikely a hotel or your student lab would actually let you reboot into your own distribution; once you have control of the hardware (which you must have), you practically own it from that moment.
CherryPy is actually a much better solution than yours:
Your lab, and your hotel room, is likely to have a screen that can take VGA or HDMI input - so you've got a display; You can get foldable silicon keyboards for $10 or so, and a small travel mouse for $10 more. So, for $45, you have something you can _already_ use at your lab or hotel room, with no one having to fear you're putting viruses on their system.