That's generally not a good idea. If you want to try FreeNAS out, then VMs work fine (just provide two virtual hard drives). If you want to put it on physical hardware, then you should choose something appropriate hardware-wise (with at least two storage drives to form a mirrored zpool).I have now tried with v. 0.95 of Win32 Disk Imager and I tried Rufus. Tried with other sticks that was USB2, but I still get the same error.
It should be possible to install freeNAS on a laptop with only 1 hdd installed, right?