2.4, page 28:
As suggested by the arguments, the scenario is supplied to Qemu as an ISO image re-
siding at var/run/demo.iso. The ISO image can not only be used with Qemu but also with
a real machine. For example, creating a bootable USB stick with the system scenario is
as simple as writing the ISO image onto a USB stick:
sudo dd if=var/run/demo.iso of=/dev/ bs=8M conv=fsync
I am pretty sure it will not work... iso are for DVD, not USB sticks.
Guess build.conf need to be edited a bit to make it easier to select a .img
by just choosing between two comments lines.