Ok I just came back up to write the intro.. I'm trying to keep it short to avoid getting bogged down by the coolness of each step. Here is what goes on. When I logon to my XP machine at work, I bring my usb key and plug it in first. On logging a window pops up first and it's a password prompt to mount my encrypted drive leonardo. It also checks a keyfile that is located on my usb key, but all I do now is type in my password. That causes my encrypted folder to be accessible to me like a normal drive, and it autoruns a startup batch file.
The batch file causes Portable versions of Firefox (all my bookmarks, my settings) to load, and launches Portable Mozilla Thunderbird (IMAP makes this work well), which is my favorite program (great GPG features and open-source!). Also Some Adobe CS4 software is loaded from the hard drive, like DreamWeaver. In the background, a service we created executes a PortaPuttY plink command to create forwarded tunnels from various remote servers and accounts, all using key-based encryption. These tunnels are automatically reconnected if they are disconnected, meaning you can use a socks 5 if you want or even better!