Below procedure describes how you can make bootable USB flash install disk. Was tested and works just fine for Windows 7 operating system.

Requirements:
- USB BOOT – check your mainboard BIOS for support
- USB flash drive
- DVD disk with Windows 7

Steps:

• beware the USB flash will be wiped-out so is recommended that you backup all data if flash drive is not new / empty unit
• insert your Windows 7 DVD and check the drive letter of the DVD drive [DVD Drive letter]
• open Command Prompt with Administrator privileges, are three metods to do that, chose the one you like:

Start Menu > All programs > Accessories > Command Prompt
Start Menu > Run > type cmd and hit enter
Start Menu > type cmd or command in search dialog and click on cmd / Command Prompt

• type in the following commands in the command prompt window to format USB flash drive using Disk Part:

diskpart
list disk (remember disk number assigned to your USB flash drive)
select disk [USB Disk number]
clean
create partition primary
select partition 1
active
format FS=NTFS (takes several minutes)
assign
exit

- less sophisticated and easier method to format your USB Flash Driver is to use Windows Explorer > Select USB Flash Disk > Format …

• check the drive letter assigned to your USB flash unit [USB Drive letter]

[DVD Drive letter]: cd boot
cd boot
bootsect.exe /nt60 [USB Drive letter]:

• copy your Windows 7 DVD contents to the USB flash drive (no special copy procedure is required)
• the unit is now ready to boot and install Windows 7