This guide works 100% for Vista & Windows 7.
Need to give credit to someone else where I got this from. This comes direct from this link http://www.intowindows.com/how-to-install-windows-7vista-from-usb-drive-detailed-100-working-guide/
The main advantage is that by using USB drive you will be able to install Windows 7/Vista in just 15 minutes.
The method is very simple and you can use without any hassles. Needless to say that your motherboard should support USB Boot feature to make use of the bootable USB drive.
*USB Flash Drive (Minimum 4GB)
*Windows 7 or Vista installation files.
Follow the below steps to create bootable Windows 7/Vista USB drive using which you can install Windows 7/Vista easily.
1. Plug-in your USB flash drive to USB port and move all the contents from USB drive to a safe location on your system.
2. Open Command Prompt with admin rights. Use any of the below methods to open Command Prompt with admin rights.
*Type cmd in Start menu search box and hit Ctrl+ Shift+ Enter.
*Go to Start menu > All programs > Accessories, right click on Command Prompt and select Run as administrator.
3. You need to know about the USB drive a little bit. Type in the following commands in the command prompt:
First type DISKPART and hit enter to see the below message.
Next type LIST DISK command and note down the Disk number (ex: Disk 1) of your USB flash drive. In the below screenshot my Flash Drive Disk no is Disk 1.
4. Next type all the below commands one by one. Here I assume that your disk drive no is “Disk 1”.If you have Disk 2 as your USB flash drive then use Disk 2.Refer the above step to confirm it.
So below are the commands you need to type and execute one by one:
SELECT DISK 1
CREATE PARTITION PRIMARY
SELECT PARTITION 1
FORMAT FS=NTFS QUICK
(Format process may take few seconds)
Don’t close the command prompt as we need to execute one more command at the next step. Just minimize it.
5. Next insert your Windows7/Vista DVD into the optical drive and check the drive letter of the DVD drive. In this guide I will assume that your DVD drive letter is “D” and USB drive letter is “H” (open my computer to know about it).
6. Maximize the minimized Command Prompt in the 4th step.Type the following command now:
D:CD BOOT and hit enter.Where “D” is your DVD drive letter.
CD BOOT and hit enter to see the below message.
7. Type another command given below to update the USB drive with BOOTMGR compatible code.
Where “H” is your USB drive letter. Once you enter the above command you will see the below message.
8. Copy your Windows 7/Vista DVD contents to the USB flash drive.
9. Your USB drive is ready to boot and install Windows 7/Vista. Only thing you need to change the boot priority at the BIOS to USB from the HDD or CD ROM drive. I won’t explain it as it’s just the matter the changing the boot priority or enabling the USB boot option in the BIOS.
Note: If you are not able to boot after following this guide means you haven’t set the BIOS priority to USB. If you got any problem in following this guide feel free to ask questions by leaving comment.