Boot Late 2010 MacBook Air from SD Card
Have you tried this tutorial or Puppy Linux official tutorial (page 21)?

You don't have to burn Puppy Linux to real CD, just repeat all installation process inside VirtualBox. Don't forget to connect your flash drive inside a virtual machine.



As a second option you can try installing rEFInd Boot Manager by Roderick W. Smith instead of rEFIt. rEFIt which seems to be abandoned.

Here is installation guide for rEFInd: http://www.rodsbooks.com/refind/installing.html#osx