Now that USB thumb drives are almost give-away items (coming to a cereal box near you), vendors are trying to differentiate themselves by offering some useful software on the drive itself. The latest innovation is something called u3, which is the name of an industry consortium that has developed a low-level protocol for launching applications directly from the USB drive itself. It is a neat idea, but with some caveats.

One of the first things a new PC user quickly finds out is that any application has to be installed directly on each PC. Gone are the days of DOS where applications could fit easily on a single 360 kB floppy disk and run from a few executable files. The u3 folks are trying to bring us back some of that functionality, and it is a worthy effort.

I tried out the SanDisk Cruzer Titanium 2 GB u3 model. There are at least a dozen more that you can find, naturally, on u3.com.

The first thing you should know is that u3 doesn’t work on anything besides Windows XP/2000.

The best feature about u3 is that it offers a simple password protection for your data. If you try inserting the drive in a Mac, or in a Windows machine where you don’t know the password, you can’t read anything on it.

While I am sure that eventually someone could crack this password if they tried hard enough, it is a great way to at least make sure that if you leave your u3 drive lying around, the data won’t be easily viewed.

There are a lot of other programs that either come with or are available to work with u3 drives. The San Disk model included portable versions of Skype, Trillian/AIM, and a limited subscription to Avast anti-virus scanner. ThinkFree makes a $50 portable version of its Office software, and there are versions of Firefox browser too, so you can take your bookmarks and settings with you when you travel. You can setup some or all of this software to automatically load when you insert the drive in your PC — this can take a while to get everything going.

Given that u3 drives don’t cost much more than non-u3 drives, it makes sense to buy one for your next thumb drive. In my case, where I use a Mac desktop, it is less useful than if I was in an all-Windows environment.