CHECK YOUR DMESG WHAT DEVICE YOUR USB STICK ACTUALLY IS!!! (here /dev/da0) 
     
create the future "/"-filesystem on your usb-drive: 

# dd if=/dev/zero of=/dev/da0 bs=1m

create a new partition table on it with a default slice 1 and make it 
bootable:

# fdisk -BI /dev/da0
  (ignore any errors)

label it for booting freebsd:

# bsdlabel -wB /dev/da0s1

edit the disklabel and change partition a from "unused" to "4.2BSD"
as partition type:

# export EDITOR=/mnt2/usr/bin/vi 
# bsdlabel -e /dev/da0s1

create the future "/" a.k.a. root-filesystem on it:

# newfs -m 0 -o space /dev/da0s1a

mount the filesystem for installation: 

# mount /dev/da0s1a /mnt 

install freebsd on /mnt (the FreeBSD installation disk1 is mounted
as /a/cdrom): 

# export DESTDIR=/mnt 
# cd /a/cdrom/7.0-RELEASE
# for i in base manpages catpages 
# do 
#   cd $i; echo y|./install.sh; cd ..; 
# done 
 
go to the kernels directory and install a kernel of your choice: 
[default is GENERIC kernel; change to "smp" for smp-machines] 

# rmdir /mnt/boot/kernel 
# cd kernels; 
# cat generic.?? | tar --unlink -xpzf - -C /mnt/boot 
# cd /mnt/boot && mv GENERIC kernel 

now, tell freebsd to mount the right root-filesystem: 

# echo "/dev/da0s1a  /  ufs  rw,noatime  1  1" >/mnt/etc/fstab 
 
create your rc.conf.local in /mnt/etc to redefine some settings: 

# cat <<EOFRCCONF >/mnt/etc/rc.conf.local 
#!/bin/sh 
tmpmfs="YES" 
tmpsize="128m" 
varmfs="YES" 
varsize="128m" 
populate_var="YES" 
hostname="eeePC" 
keyrate="fast" 
keymap="german.iso"
EOFRCCONF 
 
# chmod 0755 /mnt/etc/rc.conf.local 
 
set a new root password manually, if you want (default="") 

# chroot /mnt /usr/bin/passwd root 
 
we should also put the following trees below /mnt:

/a/cdrom/7.0-RELEASE
/a/cdrom/packages

# cd /a/cdrom
# tar -cf - 7.0-RELEASE | tar --unlink -xpf - -C /mnt
# tar -cf - packages    | tar --unlink -xpf - -C /mnt