Is there a way to protect a .exe file on a usb from being deleted but allowing people to run it and also use the rest of the storage available? The way that i found was, an mp3 player than i have, when plugged in, creates a virtual CD-ROM drive with an autorun on the .exe file. But also shows itself as a removable drive (music stored here). Anyone have any information on how this is created? The mp3 player does not have any company logo or anything that can be traced, and the only popup from the .exe is "AMT" (Automatic Music Transformer).

it's U3 technology

the hardware in the usbstick, will simulate an usb hub with a connected cdrom drive who's autorun is set to run something from the usb drive.

there are no fixed way to forbit write to an usb drive, because that's entirely against the priniciple of the device, reusable solid state storage;

doing it in hardware, or using rootkit technology are options but neither is viable.

USB sticks are hot news today for the record:
http://www.news.com/8301-10789_3-9932600-57.html?tag=blog.promos

there was an open variant which is offcourse at a technical disadvantage.
called "switchblade"

alternatively use truecrypt. just set it up to autorun with an automount option or something. i'm sure you can play around with the settings.

Maybe in this case social engineering is the best solution.
Just tell your friends don't f**king delete that damn file.