Creating bootable USB for OS X Leopard
I've done a bit of searching, and found these two articles:


How to Create a Bootable Mac OS X USB Disk
Make a Bootable Mac OS X 10.7 Lion Installer from a USB Flash Drive


The first article was written with Leopard in mind and does advocate the use of SuperDuper, much as you've done.

With that said, one of the comments notes that you need to partition your USB thumbstick with a GUID partition table, and, while not stated, I would certainly use the HFS+ filesystem for your partition.  Did you do it that way?  It also appears that you need a flash drive that is at least 8 GB in size.



One more thing to try:


Shut down your mac.
Hold down the option key at bootup.
Do you see your USB flash disk an something to boot off of?

If so, you can select it to boot off of it.  (You can also hold down Command-V while doing so to boot in verbose mode; it should give you white text on a black background, logging details of what the computer is doing.  If you can get that far and it gets stuck, can you share some of what it says, especially anything near the end or anything that looks suspicious like it may have gotten stuck there?)
If not, it means that your computer doesn't recognize the drive as something it can boot off of.





Here are a couple of more thoughts:


if you have another Mac, buy yourself a firewire cable, boot the second Mac into target disk mode (hold down 'T' at bootup), insert the DVD into it, and you should be able to boot off of the DVD through the other computer.
borrow a USB DVD drive, and boot off of it.
just a wild thought that I'll throw out, but would be more trouble than it is worth for one computer, and it well beyond the scope of what you really want to do.  You could set up NetBooting to send an image file for the computer to boot up from over the network.  Buy Mac OS X Server from the App Store if you are using Lion (and download Apple's server admin tools so you can run Server Admin), or try out JAMF software's NetBoot Appliance (that will run as a virtual machine, under OS X, Windows, or Linux), and (hand waving here; you might be able to use "System Imaging Utility" in the server tools) set up a NetBoot image of your installer DVD to install the software.