I have done this many times since I posted this question.
Create usb stick like this:
sudo dd if=/<path to iso file>/<name of iso file> of=/<path to usb stick> bs=32768 conv=notrunc,noerror,sync
Put the USB stick into your Mac and press the power button while holding down Command ⌘+Option+O+F
At the prompt, type the following:
Note: If you are booting linux then use
,\\yaboot, but if you are booting a Mac OS use
Note 2: If your stick is in the right side of the machine, then you need to do this:
Note 3: If these commands don't work, then there is most likely a problem with your media or iso file.
I have found that Ubuntu, Debian, and openSUSE work great. I cannot get Fedora or Gentoo to boot this way yet. My optical drive does not work anymore, so this is how I install OS X on my machine. I made a live USB stick of the OS X install disc this way.