Some kind soul gifted me a 1GB USB drive over the holidays. I'd never seen one that small (not in recent years at least...). I have uses for my larger drives, but what can one do with a 1GB USB keychain drive?
Make it a Linux live USB. An installer, or a sysadmin/rescue distro (like GRML), or a lightweight distro so you can carry on working on a machine with a crashed hard drive, or carry the same environment across different hardware
You could also use it instead of a hard drive for a thin client or firewall distro. Old PC without hard drive + USB drive + software = firewall applicant or thin client
Set it up as a Portable Apps USB to test websites in various older versions of Firefox they offer (all freeware).
I also have one that I've used to: exchange documents at meetings, move an email folder between machines, carry PDF files to print on a client's FAX machine (no printing on WiFi network connection), bring a few picture to print at a local photo kiosk, carry data into facilities that forbid laptops in the secured perimeter, etc.
Basically anywhere a 1gb CD could be used but a more compact form is needed/or desirable.
Why not put it into a block of resin and have something nice to put onto your desk. I did this with the Chips from my Memory upgrade for my TRS 80 (64 KB total Memory) and nowadays People cannot believe that we programmed full applications into Memory 1/20 the size of what the average digital photo Needs.