Note: Debian 7 (Wheezy) - Not sure if this version is not affected if you don't physically have a CD/DVD drive present - I was able to do the install from USB stick using the pendrivelinux Windows tool with “Unlisted Linux ISO” setting (link/info below) on a Dell OptiPlex 780 that had a DVD drive physically present.
Problem: Getting Debian 6 (Squeeze) installed onto a PC or in my case, an HP T5520 thin client with out an external USB CD/DVD-ROM drive. While you can use one of the many tools around to copy the ISO image to your USB stick and make it bootable, the Debian installer gets hung up on not being able to find a CDROM drive or device to mount.
Solution: Create two partitions on the USB stick, on the first partition use the Windows pendrivelinux installer tool to copy the ISO and make it bootable. Extract a copy of the ISO to the second partition. The Debian installer detects the second partition as an installation source, and mounts it under /cdrom for us and completes the installation with out any extra help.
dmesgwill show you, make sure you identify the right device, otherwise you could hose something
yum install dosfstools
mount /dev/sda2 sda2/
mount -o loop IRLP_CD_9.01.iso iso/
cp -R iso/ sda2/
sync- this flushes the disk cache.
umount sda2/- wait for the command prompt to return before removing the USB stick!