This is due to the changes in anaconda for Fedora 17, which has therefore caused changes in the livecd-tools. Recently, this command worked:
livecd-iso-to-disk --format --msdos <path to iso> /dev/sdX
where sdX is sdb sdc depending on where your media was linked to the system.
Note that you need to use the latest version of livecd-tools to create correct media. You can also use direct dd, which worked for me last week.
dd if=mediaiso of=/dev/sdX
Since the behaviour of anaconda is still changing, the documentation isn't stable as of now. It will be fixed before the F17 final release.
From the wiki page:
In Fedora versions prior to Fedora 17,
a DVD image written to a USB stick
with dd or an equivalent tool will
function as a network installation
image unless a special kernel
parameter is added on boot: it will be
capable of performing an installation,
but it will need to retrieve packages
from network repositories, it will not
be able to use the packages present on
the stick. To allow the installer to
find the packages present on the
stick, use the anaconda repo=
parameter, pointing to the USB stick
by its device node, label or UUID. DVD
images of Fedora 17 do not suffer from
this limitation.
Read the docs lately?