When you boot off a USB disk, and use only files from the USB disk, then you are safe from interference from any other operating system which may reside on the machine hard disk.
However, if the machine hardware is hostile, then you won't be protected. Hardware key loggers work regardless of the booted operating system. Malicious BIOS code may also make nasty things; BIOS code is executed before your OS is loaded from the USB drive, so there is nothing your OS may do to really defend itself against an evil BIOS.
And let's not forget the classic "thinking out of the box" methods, e.g. someone 100m away with a telescope, zooming on your screen and reading everything that you read yourself (for a trickier but funnier method, the telescope zooms on your glasses and observes the reflection of the screen). Or reconstructing what you type on the keyboard, using a mere sound recorder under the table (in any keyboard, each key makes a slightly distinctive sound, sufficiently distinct to allow for ulterior reconstruction of what you type). If you are serious about security, then environment matters.