I can't see how having any format can affect it ......... as everything gets overwritten.
You should convert the ISO to Hybrid, IIRC, before doing this.
You have a choice ......... you can convert the ISO to write to a partition on the USB stick (it must be a primary partition I think) and you can put a separate boot manager on another (any) partition to boot the ISO.
The type of Hybrid you create determines which scheme you use to install it ......... full USB drive or a partition of the drive.
I use this to prepare the ISO for installation on a partition .........
isohybrid -partok "$ISO_FILE"
Be aware that the original ISO is converted, so you might wish to work on a copy.
It is common practice here to have a 'live' install on one partition, done with LiveUSB Converter, and use another partition for Hybrid installs, with a general boot stanza to launch whatever ISO is written to the partition.
Good luck EDIT:
This wee script might be of interest to install to a partition, provided you already have the stick booting from another partition as described above ...http://dl.dropbox.com/u/5838889/iso2usb-Alpha-0.4.sh