Boot from Windows 8 ToGo. Once Windows has loaded open the root of the drive containing Windows ToGo. A folder "My Documents" will be on the root of the drive. Open the folder. Make sure that show hidden files option its on and that show extension of know filetypes its on.
Inside this folder there will be a file called "desktop.ini". Rename the file "desktop.ini" to "desktop.ini.old". Do not delete this file since it will be used later.
Inside the "My Documents" folder there should be a "Music","Pictures" and "Videos" folder that also have a file called "desktop.ini". Rename each of the "desktop.ini" to "desktop.ini.old"
Open Windows Explorer (win + e), expand Libraries, Documents, Music, Pictures and Videos and remove each of the public folders from each by right clicking on the public folders and selecting remove from library.
Right click on Documents, select Properties and then click on "move..", on the selection screen select the "My Documents at the root of the drive". Repeat the process for "Music", "Pictures" and "Videos" and move them to their corresponding folder inside "My Documents"
Inside "My Documents", "Music","Pictures" and "Videos" there should be a file called "desktop.ini" and "desktop.ini.old". Rename the "desktop.ini" in each of the folders to "desktop.ini.win". Now rename "desktop.ini.old" on each of the folders to "desktop.ini".
The reason the first "desktop.ini" inside the folders was renamed to "desktop.ini.old" its because it would otherwise conflict with the "desktop.ini" that was already stored at the Windows Folders.
The "desktop.ini" its only used to store the icon location for the folder.
To complete customizing user folders open the root of the drive with Windwos ToGo, go to users and then open the user you created when installing windows, in my case "Elmer". Right click on "downloads" select properties, then "location" then "Move" and move it inside "My Documents". The other folders could also be move if needed but for most users that should be fine.
In the following post the "Default App Associations" will be set to run from the portableapps.