Now for those wishing to transfer an Ubuntu ISO to a USB drive don't need to depend upon Ubuntu's USB creator or any third-party program, but can directly copy the ISO contents to a USB device (e.g. by using the dd command). The Ubuntu USB creator can still be useful though for enabling persistent storage support. This hybrid ISO support is supported both for the desktop LiveCD as well as the alternate/server installs, but only for i386 and x86_64 architectures.
Ubuntu and Debian were late in supporting this hybrid ISO functionality as they couldn't use the isohybrid utility as that would break Jigdo downloads, so they ended up switching to the xorriso utility for CD image generation. Debian addressed these hybrid ISO issues and xorriso improvements back in January.
The hybrid ISO change was mentioned today on the ubuntu-devel mailing list.