t seems that the 1.4MB floppy images are disappearing, so let's make a boot image for usb from the other bits that are given us. Specifically let's use pxeboot's vmlinuz and initrd.img.

Red Hat Fedora Core 2 Linux and Red Hat Enterprise Linux 3

We'll make a 7MB boot image here:

mkfs.vfat -C bootimage.dd 7168
mkdir bootimage.dd.dir
mount bootimage.dd bootimage.dd.dir -o loop
cp -a /FC2/images/pxeboot/vmlinuz bootimage.dd.dir
cp -a /FC2/images/pxeboot/initrd.img bootimage.dd.dir
cp -a /FC2/isolinux/* bootimage.dd.dir
mv bootimage.dd.dir/isolinux.cfg bootimage.dd.dir/syslinux.cfg
umount bootimage.dd.dir
syslinux bootimage.dd

Now push this to your usb device. Mine is /dev/flash:
dd if=bootimage.dd of=/dev/flash

An alternative method is to use the boot.iso:

mkdir boot.iso.dir
mount boot.iso boot.iso.dir -o loop,ro
mkfs.vfat -C bootimage.dd 7168
mkdir bootimage.dd.dir
mount bootimage.dd bootimage.dd.dir -o loop
cp -a boot.iso.dir/isolinux/* bootimage.dd.dir
rm bootimage.dd.dir/isolinux.bin
mv bootimage.dd.dir/isolinux.cfg bootimage.dd.dir/syslinux.cfg
umount bootimage.dd.dir
syslinux bootimage.dd