From what I was told the key file is less than 1k so the smallest USB you can get would work.

In addition to the Windows7 vhd,  I should think RamDisks would work too. 

Also BestCrypt and other utilites can mout virtual drives on non-Win7 systems. 

I wonder how it would respond to a virtual driver like Daemon Tools that can mount ISO images.  I am wondering if you could make a small ISO, key it, and then put the key file in it.  Throw that and daemon tools (freeware) on a thumb and you can mount and use it anywhere.