barnowl, I have several flash drives and I love them to death. You can use it as a floppy or CD-R disk to save any files you like without the bulk. It is also large enough to store tons of music, videos, pictures (from digital camera or internet), and more.
I also export my favorite sites from internet explorer to the flash drive, so I can use them in any computer away from home.
I love being able to take it anywhere with me. Many times I add piano music to it, and listen from any computer, even at work. I also store tons of piano sheet music on it in pdf format. Usually I save them from public domain websites. Then I can print out music on the go.
Regarding installing programs, it would not work to just save the program files. I save installers on the flash drive, and then install any program I like on any computer. Once you start using it you get hooked trust me. I hope this helps!
have fun!