Does this mean if i create it via a windows computer, i can still make it run and work on my netbook which is on linpus linuxx?
Yes that's exactly what it means

.. Create the LiveUSB on a Windows PC, then plug it into the AA1, then boot from it by pressing the F12 key at bootup and selecting the USB drive.
Be aware that a FULL Ubuntu installation on a 500MB RAM AA1, will be a little heavy, and will probably run slower than Linpus Lite .. there *may* be better suited distributions for you needs .. what are you primarily going to use the AA1 for ?, and what applications would you consider *necessary" ?
I tried PeppermintOS on mine and loved it, pretty much just as quick as Linpus, but also had access to all the latest software as it uses the Ubuntu software repositories .. Peppermint is a "Cloud" type distro, so doesn't come with an office suite preinstalled, but there is nothing stopping you from installing one (or anything else you think may be missing by default) through the Synaptic package manager
http://peppermintos.com/Next I'm going to test Xubuntu and Lubuntu .. which are again both lighter than the full GNOME desktop of Ubuntu, but still use the Ubuntu software repositories.
http://www.xubuntu.org/and
http://lubuntu.net/All 3 of those are based on Ubuntu and have access to all the Ubuntu software, but are "lighter" than the full GNOME/Unity desktop, so would be easier on the AA1's limited resources.
But if you really want the full GNOME/Unity desktop environment of Ubuntu .. it *will* work on the zg5 .. it just feels slightly to heavy for the hardware, I reckon a RAM upgrade would easily fix this, but it's not easy to add RAM to the AA1, you have to completely disassemble them to fit it
