Did you try suse image writer?
When it was done writing to my usb, windows 7 couldn’t recognise the disk so maybe it didn’t format the disk to something windows can know (and you shouldn’t worry about VFAT too).
you can read more here.
I had to type *.iso to make it (suse image writer) recognise the network install image.
I have installed from USB, and it seemed easy enough.
Your best bet is to download the live CD image, and write that to the USB using image writer or similar.
The live CD image is already in the correct format for booting from a USB. The DVD image requires a minor tweak (use the isohybrid command, which you might have to first install). If you have not done it before, going with the live CD image (iso file) will be the best way to start.
Limitations on VFAT don’t actually matter. Installing the iso on a USB overwrites the original formatting anyway.