Required:

   * USB Flash Drive (4GB+)
   * Microsoft OS Disk (Vista / Windows 7)
   * A computer running Vista / Windows 7

Step 1: Format the Drive
The steps here are to use the command line to format the disk properly using the diskpart utility. [Be warned: this will erase everything on your drive. Be careful.]

  1. Plug in your USB Flash Drive
  2. Open a command prompt as administrator (Right click on Start > All Programs > Accessories > Command Prompt and select “Run as administrator”
  3. Find the drive number of your USB Drive by typing the following into the Command Prompt window:
     diskpart
     list disk
     The number of your USB drive will listed. You’ll need this for the next step.  I’ll assume that the USB flash drive is disk 1.
  4. Format the drive by typing the next instructions into the same window. Replace the number “1” with the number of your disk below.
     select disk 1
     clean
     create partition primary
     select partition 1
     active
     format fs=NTFS
     assign
     exit
     When that is done you’ll have a formatted USB flash drive ready to be made bootable.

Step 2: Make the Drive Bootable
Next we’ll use the bootsect utility that comes on the Vista or Windows 7 disk to make the flash drive bootable.  In the same command window that you were using in Step 1:

  1. Insert your Windows Vista / 7 DVD into your drive.
  2. Change directory to the DVD’s boot directory where bootsect lives:
     d:
     cd d:\boot
  3. Use bootsect to set the USB as a bootable NTFS drive prepared for a Vista/7 image. I’m assuming that your USB flash drive has been labeled disk G:\ by the computer:
     bootsect /nt60 g:
  4. You can now close the command prompt window, we’re done here.

Step 3: Copy the installation DVD to the USB drive
The easiest way is to use Windows explorer to copy all of the files on your DVD on to the formatted flash drive.  After you’ve copied all of the files the disk you are ready to go.

Step 4: Set your BIOS to boot from USB
This is where you’re on your own since every computer is different. Most BIOS’s allow you to hit a key at boot and select a boot option.

Install and enjoy.

I've done this once so far, working on doing it again as I type this.

HEHE, i have been doing this for years. Have a USB drive that will boot xp/vista/7 which ever I chose. I consider it a must have. Great post and that is actually EXACTLY how I do it. Works perfect.

GREAT post.