Complex issue regarding ISO linux and drive images
 

Heres the problem, Iv got a usb thumb drive with linux on it that runs well, but thats all I can use the drive for. Id like to be able to use the slack space to move files around like normal, in a windows enviroment. Id also like to be able to use the program Qemu with it, thus letting me plug it in and use it from within windows.

The solution, I belive, is to use ISO linux on the drive, and an image type that would dynamically resize itself... However Im to much of a novice to know exactly how to do this. I would appreciate any help on the subjects.