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How To create a bootable USB of Windows 7

Microsoft has released a free tool called Windows 7 USB/DVD Download Tool which allows us to create a bootable USB of Windows 7 for installation on netbooks.

Using the Windows 7 USB/DVD Download Tool

Before you run the Windows 7 USB/DVD Download tool, make sure that you have already purchased Windows 7 ISO download from Microsoft Store and have downloaded the Windows 7 ISO file to your hard drive. If you have purchased Windows 7 but have not yet downloaded the ISO file, you can download the file from your Microsoft Store Account. [Jabez: If you purchased the boxed set, just create an ISO from the CD by using ImgBurn, and follow the steps below.]

To make a copy of your Windows 7 ISO file:

Click the Windows Start button, and click Windows 7 USB/DVD Download tool in the All Programs list to open the Windows 7 USB/DVD Download tool.
In the Source File box, type the name and path of your Windows 7 ISO file, or click Browse and select the file in the Open dialog box.
Select USB to create a copy on a USB flash drive or DVD to create a copy on a DVD disk, then click Next.
If you are copying the file to a USB flash drive, select your USB device in the dropdown list and click Begin copying. If you are copying the file up to a DVD, click Begin burning.