Earlier tool live-fat-stick uses syslinux to create multiboot USB stick/hdd on a vfat parition without having to format the stick preserving existing data and copying whole ISO so the same stick can serve as demo as well as to copy ISOs for distributing. However the disadvantages are all of them that comes from using vfat.
Grub2 has come a long way and almost all major distributions now support booting from the iso image via loopback. So here is live-grub-stick script that uses grub in place of syslinux bringing in all the advantages of using grub2.
Currently live images of openSUSE, Ubuntu, Fedora and all their clones are supported. Go ahead and fork it if you would like to add support for your distribution.