There are plenty of guides out there that outline a Windows 7 installation from USB, but most of them ask for Vista to be installed first. Er… No thanks. Pull up a seat and watch how it’s done as we explore how to install Windows 7 from a USB flash drive using Windows XP.
Step 1:
You’ll need a few items downloaded and ready to go before you can get crackin’ with your USB install of Windows 7:
The HP USB Disk Storage Format Tool
A copy of MBRWizard for your version of XP
MagicDisc (or any virtual DVD/CD-ROM you wish)
A Windows 7 beta ISO
Step 2:
With your flash drive plugged into the system, install the HP USB Disk Storage Format Tool and give it a run. Make sure your settings precisely match our settings and tap start:


Step 3:
Now that the flash drive has been prepared, it’s time to mount the Windows 7 ISO as a virtual DVD. We’re going to use the Windows 7 ISO in steps four and five, so this step is critical. If you’ve decided to use MagicDisc, you can assign the CD image to a virtual drive by right clicking on your ISO and selecting a drive letter for it:

If you already have a virtual CD/DVD-ROM application such as Alcohol 120% or Daemon Tools, we reckon you’re savvy to it and can make the mounting magic happen on your own.

Step 4:
Now it’s time to start making that flash drive bootable. Launch a command line and navigate to the directory in which you saved MBRWiz.exe; in my case, I saved it to my D: drive. Once there, invoke the MBRWiz /list command to display a list of drives for your system:

Next you’ll need to issue the MBRwiz /disk=# /active=1 command, where the pound sign represents the number of your flash drive from the prior command:

Lastly, we’re going to copy the Windows 7 ISO’s bootable properties over to the flash drive with the Y:\boot\bootsect /nt60 X: command. In this case, Y: represents the drive letter for your virtual Windows 7 DVD and X: represents the drive letter for your flash drive.
Caveat: This command can only be used to copy the bootable bits from an ISO that matches the instruction set of the current Windows installation. Users running 32-bit Windows XP can only execute this command from the 32-bit ISO of Windows 7; this is also true for Windows 7 x64 which requires Windows XP x64. If you’re running 32-bit Windows XP and hope to configure a Windows 7 x64 flash drive, we have confirmed that it is possible to copy the files from the 64-bit ISO after executing this command with the 32-bit Windows 7 ISO.

Step 5:
All that remains is copying the Windows 7 files from the virtual DVD over to the flash drive. Just a simple copy and paste, that’s it!

Do it to it!
With the drive prepped and the files copied, it’s time to configure your BIOS to boot from USB and let ‘er rip! This whole Windows 7 installation from USB business works just like a DVD, so be sure to leave the flash drive in until Windows 7 is fully installed.
SOURCE: ICRONTIC.COM
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