Thanks for the input guys. I will take a look into those things when I get a minute.
I am working on rebuilding part of the BartPE setup that I have and in addition I have just gotten done with an experimental install of XP (not a BartPE or WinPE -- Full XP) on a USB device. The nice thing is that it seems to work well with the exception of an issue with a working swapfile. It booted up fine otherwise and no dreaded 7B error. The trick was making the USB driver a requirement for booting and get it loaded earlier in the sequence. USB-HDD support in the bios helps of course.

@4x³-3x²+2x-7=dropout: That may work from the management area but unfortunately it doesn't seem to work anywhere else unless it makes it show up for other applications.
@kare: looks promising. I will include it in my next build and see what happens. Still trying to get the video drivers in there too. Would be nice to have decent laptop video drivers along with my network ones.
EDIT: Ok. The usbhub.sys fix doesn't seem to do anything although I'll leave it there anyways as it may play a role behind the scenes. kare's suggestion has done the trick however. If I connect the drive up I can run that utility to have all partitions assigned a drive letter. It will even assign a drive letter to the diagnostics partition on my laptop. Note that this partition is not normally assigned a letter since it uses a special, Dell only, partition type. It is standard Fat32 otherwise

. Now I did find that I had to have HwPnP detect devices before I could mount anything although that was all I had to do. USB worked right away. Firewire had to be detected though. This build also included in a crap load of network and mass storage drivers. This will increase portability so much it isn't even funny. I used the BartPE Mass Storage driver pack plugin from Driverpacks.com and the UBCD4Win Network Drivers Addon pack v2.02 found in their forum.
Now then how do I get HwPnP detect devices during the bootup phase so I don't have to do it manually? Doing that and this setup will be near complete and very portable from what I can tell.
P.S. - If anyone has any hints on video driver pack then I would be game to it. If possible it should work on both laptops and desktops. I have been living with the vgasave driver that this setup has been using for now since it does technically "work".