This is a very good idea. Maybe we could try it with Amazon EC2? I have had success building an AMI in the past, and it's very easy to do... although not free, and not local. I do though like the idea of thumb drives... and I can't imagine it wouldn't be an interactive workshop!
That might be rad, if the network connection is reasonable-- If we had 50 users for an 8 hour meeting and can swing the cheap option, that's only $35. Show me 50 thumb drives for $35 and I'll show you 2 thumb drives and a pile of plastic. Also windows users could get on with putty, if there are any of those.
To pile onto this, if we choose to go that way I can get MSU to donate a big pile of thumb drives, though they will have some combination of MSU, ICER and Physics Department logos slapped onto them... :-)