You can't drag them, you would need to install them again, specifying that you want to install it on the flash drive and it would have to be quite a large hard drive.
You can use it as "ram" but only on vista/windows 7. Its called readyboost. When you plug it in, on the autoplay window, select use with readyboost. It will analyse it and if its fast enough, it can use it as ram although it wont be as good as having proper internal ram