Well, first off...The BIOS and the Mobo have to support a cold boot off the USB; if they do, then all the other power and sleep states will follow.
Next up, you are going to have to patch the kernel if it already doesn't support it; See,
http://www.lammerts.org/software/kernelpatches/ for a good patch. That is need because of the way most Linux distros handle storage device detection upon boot which is asynchronous. That should work for most systems. You are probably also going to need Syslinux,
http://www.kernel.org/pub/linux/utils/boot/syslinux/ which makes a USB drive bootable under Linux.
There are quite a few ways to get Linux to boot off of a USB flash drive, this also works and is at least partially necessary for booting off a 2nd HDD via USB; I have also managed to do this, to some extent, with BSD and Plan 9.
This isn't much different from getting any given distro to run as a LiveCD: OliveBSD, Slax, and Plan 9 are ideal candidates for this as they have small full-install images and are quite quick.
If you don't want to do that, perhaps the easiest way is to put DSL ([censored] Small Linux) or Slax onto a USB Flash Drive from the beginning. See Pendrivelinux.com
The My Slax Creator is probably the easiest method I could come by; I would recommend first preparing the USB stick on a Windows system just because it is easier to begin with. Simply download it, install, plug in the USB Pendrive Media, get the Slax (or other) ISO, then go through the wizard to put it on the USB. Reboot, and that should make it a bootable USB. That should get you good and ready.
On the concept side, the best thing about USB Pen Drive OSes is that you can have alot of them and carry them around with you; simply boot into the OS you want that matches your needs and/or binary compatibilities. The benefits include;
1.) No need for a Dual-Boot Win/BSD or Win/Linux setup; some people find this a tad complicated
2.) Lighter and it can be transfered from system to system; say you have two laptops, you can easily transfer the OS across.
3.) Use of the HDD on a given mobile system for specific long term storage of certain files.
4.) Easy to have triple-boot, or even pentuple-boot systems with little initial hassle.
5.) It looks cool (I like to call this the 701C "Butterfly" Factor/Effect)
I do know my T43 can boot from a USB stick, but I am not sure about the T23. The easiest way to check is to plug in your pendrive and, upon startup, enter the BIOS and see what boot options it lists. USBZIP os a common one, but if it is an advanced BIOS, like the one in my T43, it should classify it as a Mass Storage Device along with some other fields.
HTH