I now have a USB key with "Mac OS Extended" format and 7.8G of stuff on it.
When I boot up (Snow Leopard) holding down the option key, it doesn't show any menu to choose where to boot from, it just ignores my USB drive. When I open the "Startup Disk" system preferences dialog, it does not show the USB drive (even though it is mounted). It is plugged directly into this mac mini, not through a hub or keyboard.
I looked around for related questions (e.g., here), and found nothing relevant.
Edit 1: This is a mac mini (model identifier "Macmini3,1") with an Intel Core 2 Duo running 10.6.8 (snow leopard).