Well, if you check the capacity of the flash drive in disk utility does it show 8GB available?
That's the first thing I did basically because I used an 8GB Micro-SD card that I had used for pictures and videos previously and I wanted to make sure there were no files there I needed to keep.
Also don't know what the 2 USB stick method is, I just formatted the 8GB storage on the Mac as MBR, then copied the SL install disk, ran Netbookbootmaker and used that to install SL on the Dell after setting the Bios options there properly.