I’ve done this and it works. The instructions are straight forward but creating the install image on my miniature USB drive took almost 2 hours.
You also might be interested in creating a standalone install drive for Mountain Lion. As with OS X Lion, Apple will likely release USB drives containing a bootable Mountain Lion installer, but this will cost you more than the App Store download. Additionally, while Apple’s OS should be available using Apple’s various Internet recovery options, this can often take a long time to download, especially if you do not have the fastest broadband connections available to you. ~ C|Net