Boot from USB key, does suspend or hibernate work?
 

One can boot Linux from a USB key, but I was wondering if it's possible to suspend to RAM or suspend Disk (hibernate) in this sort of setup or is it impossible since going into either mode wipes out the USB driver so you can't return?

Depends what sort of "boot from USB key" you have in mind. I have a USB key with nothing more than a type of rescue boot setup on it. It will boot my system if the normal boot loader (lilo, grub) etc have got corrupted. Since what I am booting is my normal hard-disk resident linux system, I can suspend to memory or disk or whatever. If however your USB key contains a "live Distro" type system which hardly touches the hard drive and sets all it needs up in RAM and on RAMdisks, then I think suspend etc is not likely to work since such a setup (unless you handcraft it) is not likely to have all the required drivers in there.