Additionally, the
Windows 7 USB/DVD Download Tool formats a USB drive to make it bootable as part of the process of taking a Windows ISO file and transferring it to USB. This is most likely the easiest way to prepare USB media for installation. You will also need to configure your system firmware to boot to the USB device before booting the hard drive in order to ensure that the setup will launch.
You can also create USB boot media for installation of Windows using the
Microsoft Deployment Toolkit (MDT) which would be particularly useful if you are installing Windows to more than one system. The deployment solution provided by MDT is capable of automating installation of thousands of systems with disparate hardware, varying...