Ok never mind I found it myself. For those having this same issue: Select "Install from a hard drive partition", find your usb stick in the list of partitions (presumably /dev/sdb1), then point it to the /salix directory. Why it couldn't find the bloody usb stick itself, I don't know.

Hi there, I'm trying to install Salix from the installer ISO (not the liveCD). I copied it onto the USB stick properly using dd, the exact command shown in the manual. It boots perfectly fine and I can proceed through all the preparation bits easily...until I hit the point where it asks me to instal...