I think we are making this harder than it should be.
I downloaded a copy of puppy and did a quick comparison.
The first step is to copy all the files from the cd to the stick. Here is where they have broken with tradition and used an isolinux folder,(maybe they are on root.. Borrowed xp machine and I have never used magiciso before.. little unsure.. it says it's a folder, but no little + unlike the compaq and rr-whatsit dirs.) but that shouldn't matter.. we can work inside it and see. If it does matter we can always put those files on the root of the stick.
from the slax page
Now you need to copy some files in the folder /boot/ (not there.. in the isolinux folder, or root of iso) of the mounted pen drive to the root of the pen drive so you can boot from it:
cd /mnt/sda/boot/
cp vmlinuz /mnt/sda/
cp initrd.gz /mnt/sda/
Move to the directory where the memory stick is mounted -- in this case /mnt/sda/ -- and change the name of the file isolinux.cfg to syslinux.cfg. Edit the just-renamed syslinux.cfg and delete /boot/ or boot/ from the lines that contain vmlinuz and initrd.gz (not needed.. they are right here)-- for example, /boot/vmlinuz and /boot/initrd.gz. This changes the location of the files vmlinuz and initrd.gz, making them visible to the bootloader at the time of boot.
Looks easy enough... but we have an isolinux.bin file.. so I would be tempted to change it's name to isolinux.bak to get it out of the way before the next step. Don't think we need the boot.cat file either so try the same trick.
Finally, use whereis to check whether you have Syslinux installed. If not, download and extract it to a directory, then run:
syslinux -s /dev/sda
Where /dev/sda is the location of your recent modified files.
Now, reboot your computer, enter the BIOS, and change the boot order. Set USB-ZIP as the first one,
And that should do it. good luck.
(now I confused myself too. If I had a usb bootable machine I would try it out to verify it will work that way.. I know what I'm getting at, even if nobody else understands me...

suppose I should now take the iso I have on my stick home to my lovely debian box and check it out properly.. I forgot how nasty xp is to work with.

)