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Requirements

1. USB flash drive 4GB or larger 2. Windows Install media (CD,DVD,ISO) 3. Motherboard capable of booting from USB


Prep USB Drive

Connect USB flash to your PC.
Open a command prompt (run as Administrator).
At the command prompt run the following commands:

Run diskpart

DISKPART

List disks

LIST DISK

Select the USB Flash disk

SELECT DISK 2

NOTE: Make sure to select the correct disk because in the next step we are going to destroy all the data.

Wipe the disk clean. (This will remove all data and delete all partitions!)

CLEAN

Create a new partition.

CREATE PARTITION PRIMARY

Select the new partition we just created.

SELECT PARTITION 1

Make the partition active so we can boot from it.

ACTIVE

Format it.

FORMAT FS=NTFS QUICK

NOTE: The "QUICK" is optional but saves you time.

Assign the next available drive letter to the disk.

ASSIGN

Exit Diskpart.

EXIT


Copy the Boot Sector

From the command line:

Change to the CD/DVD drive letter where the windows media lives.

D:

Now change to the boot\ folder

CD BOOT

Copy the boot sector to the new partition

BOOTSECT.EXE /NT60 E:

NOTE: This assumes E is the drive letter of the USB Flash drive.


Copy Installation Files

Copy everything from D: to E: using what ever method you choose.

xcopy d:\*.* /s /e /f e:\


Finishing up

Now the USB drive should be prepped and ready to go. Insert it into your PC or server. Set the BIOS to boot from USB. Install windows (with the added bonus of installing in 1/3 the time thanks to USB being much faster than traditional optical media).


References

http://www.intowindows.com/how-to-install-windows-7vista-from-usb-drive-detailed-100-working-guide/