Rather than boot the Yocto Live USB Image natively, I prefer to use a VM. It's pretty straight forward to convert the current live image file, devkit-live-img-final.binblob.bz2, using VirtualBox's CLI, VBoxManage. Here are the steps I used in Win7:
1. Uncompress using tool of choice--I used WinZip.
2. Convert binblob file to .vdi or .vmdk using the command (change format option to 'VDI' as appropriate):
> vboxmanage convertfromraw --format VMDK devkit-live-img-final.binblob E:devkit.vmdk
3. Create a new VM in VirtualBox and choose the option to create from an existing virtual disk and point to the file you created above.
That's it. I've tried to do the same in VMWare Workstation 10 with the .vmdk and I get a couple fatal boot errors and a hang. I tried exporting from VirtualBox as a .ova and I get the same type of hang.