How to Create Bootable USB Stick for Windows 7, Windows Server 2K8
                                                  and Windows Vista.

              I recently had the need to install Windows 7 from a USB stick. This was because I didn't have
          a working DVD drive to hand. I found a couple of tutorials online explaining how to create the disk.
          They generally explained this technique:

          Requirements : USB Pen Drive (Minimum 4 GB), Windows Operating System DVD or ISO image (32 bit or 64 bit)

          Go to COMMAND prompt, Type    C:\> diskpart

          (You may see an error sometimes. Therefor don't forget to run COMMAND prompt
           using Run as Administrator option)

          DISKPART> list disk

          Select the USB device from the list and substitute the disk number below when necessary

          DISKPART> select disk 1
          DISKPART> clean
          DISKPART> create partition primary
          DISKPART> select partition 1
          DISKPART> active
          DISKPART> format fs=fat32
          DISKPART> assign
          DISKPART> exit
          xcopy X:\*.* /s/e/f Y:\
          where X:\ is your mounted image or physical DVD and Y:\ is your USB device

          However it appears diskpart is unable to see USB sticks under Windows XP. Therefor those using
          Windows XP I have found an alternative method.
          Firstly find the bootsect.exe tool on the Windows 7 disc (in the boot directory). Then run this command
          where Y is the drive letter of the USB stick.

          D:\boot> bootsect.exe /nt60 Y:

          Now copy all the files from the Windows 7 disc onto the USB stick. This can be done by dragging in the
          GUI or using the xcopy method shown previously.