Trying… (grrrrr!) to have a USB Key to boot Windows PE

I have two Sandisk Micro Cruzer 512MB USB keys that I bought cheaply as they were end of line. These devices have a unique and excellent feature of a retractable plug built in, thus there is no cap to lose. The size is quite useful for many things. I got one of them formatted as a Windows 98 boot device using an HP utility that I got off the net. It is formatted as FAT16 and the whole capacity is available for use. I use this one mainly to boot to DOS to flash BIOS updates on PCs.

The second one is formatted as FAT32 and I set it up fairly recently as a boot device for Windows PE. The problem is, it keeps getting corrupted somehow. Then PCs can’t boot off it, and they say there is a "disk error". Then I have to use a CD to boot Windows PE (but I can still run applications off the key, just not boot off it).

This has happened twice now and I am getting grumpy. I have swapped the keys over but still the Windows PE key gets some sort of corruption and stops being able to be booted from. What is going on here?