What media are using for an installation and where did you download the ISO? A genuine Windows download wouldn't throw that message to prepare the machine for an installation.
If that is the case, save you time because its chances of passing Microsoft's Activation process are very thin.
2006 would have been Windows Vista and that's not worth the time it would take to get it running.
If it's ignoring a properly bootable device, it may be because there's something further up in the queue. Can you look in BIOS and make sure it's set to use the flash drive.
If BIOS has a setting named USB Legacy Support, make sure it's set to Enabled. If it's not, there is no power to the USB Ports until the Operating System cuts in.