The simplest way to clone the retail DVD to usb is to use disk util.
partition the 8gb usb stick with an apple partition table and 1 partition, then insert your retail DVD and use the restore function to restore the DVD to the stick (check the "erase destination" box).This takes approx. forever (about 3 hours on my machine) but gets you a nice clean clone which you can use exactly as you would a retail DVD in a retail-style install.

Somewhat more complicated but faster is using ditto. one way to do this is to partition format your usb stick in disk util to one partition, MBR/HFS+ then making sure you have owners enabled (easiest way is to type vsdbutil -a /Volumes/NameOfStick) type:

ditto -V /Volumes/Mac\ OS\ Install\ DVD /Volumes/NameOfStick

This has the additional advantage that you get a writable stick which will take a bootloader or other modifications if you so wish.

For a lot of install methods , it is important that you rename the stick to "Mac OS X Install DVD" (no quotes)