There are a couple of good guides I came across to getting round the BIOS restriction (How-to Geek and Instructables), but they focus on using a CD (my CD drive is kaput), and the guide that does mention floppies tells you how to write one in Windows, so here's a version for Linux.
1) Download Plop Boot Manager
2) Extract the files and dd the floppy image (plpbt.img) to a floppy disk using this command (change the floppy name if necessary):
dd if=plpbt.img of=/dev/fd0 bs=1024 conv=sync ; sync
Boot from the floppy with the USB inserted and you'll get an option screen which includes a USB boot.
Update: I tried the Live session again and realised that I'd hit the enter key, and Crunchbang was just taking a long time to load because it was running from a USB 1.0 socket: for about a minute or so, it looks like the menu is frozen.
NB: Running a Live OS from a USB 1.0 socket is s..l..o..w.