Copy the following files from the ISO to the root of your USB flash drive (do not create folders on the flash drive):
gparted.dat
All files from the boot directory
All files from the syslinux directory
Open a command prompt and run syslinux.exe -ma X: (where X: is the drive letter of the USB flash drive).
Verify that the system file ldlinux.sys was created at the root of the USB flash drive (You may need to change the Windows Explorer view options to show 'hidden files and folders' and 'protected operating system files' in order to see the file).
Now your USB Flash Drive should be ready to boot from and run Gparted Live.