John,
regarding formatting a USB thumb drive, I'd recommend using gparted which is flash drive friendly.
If you're ever going to plug this USB drive into a Windows box, consider creating the first partition with FAT or FAT32 formatting (depending on size). Consider making this first partition large enough to use as storage for shared files.
Create the first partition with a 1MB offset from the beginning of the drive, this is easy to accomplish with gparted (it's a simple check box) but other tools may facilitate this requirement. This is known as "Alignment" and is the single most important aspect of partitioning and formatting drives, including HDD's and all Flash storage.
If you're serious about installing tc to a thumb drive then create a second partition and format it with a linux file system like ext2 and install Tinycore to it.
Changing the Allocation Unit Size to anything larger than default 4kb is usually more wasteful of space than any performance gains, especially for small slow USB thumb drives. AUS (default size of 4Kb) is generally limited by file system.
The term "Clusters and Sectors" have gone the way of the Dinosaur, when you think in terms of Flash memory think of pages and Blocks.