To complete your Windows 7 power-user experience, you may consider
dropping the whole darn OS onto a USB drive. Whether you carry it around
in your pocket or toss it in a desk drawer, it's a perfect boot disk
for emergency installs-including those times when you're working with a
netbook or some other computer that lacks an optical drive. Even better,
your install times will be significantly reduced, thanks to your key's
flash memory-we shaved off minutes from our total install time.
Here's
how to create a schmancy-fancy boot key for either Windows 7 or
Vista-but not for other OSes, so please don't try! We've run a truncated
version of this article in the magazine before, but because it was so
incredibly popular-and so germane to this feature story-we've decided to
share it again, this time with more detail and screens.
1. Format Your USB Key 
Plug in your USB key and back up any existing data stored on it. You'll
need to format the key (thus erasing existing data) before you can make
it a bootable device. We used an 8GB key, but a 4GB key will also work.
2. Partition that Key in CMD 
Open up a command prompt as an Administrator. You can do this by
searching for cmd.exe in your Windows/System32 folder, right-clicking
the executable, and selecting "Run as administrator." Alternatively,
type CMD in the Start Menu search field and activate the command prompt
using Ctrl + Shift + Enter.
You should now be under C:\Windows\system32 (assuming your Windows
partition is the C drive). Type diskpart in the command line to enter
the Disk Partition command-line tool, which lets you format and create
partitions on active disks. Now type list disk to reveal a list of all
your active disks, each of which is associated with a number. Make a
note of which one is your USB key, based on the capacity. In this
screenshot, our USB drive is Disk 2.
3. Format Away (Command-Prompt Style)
It's
now time to enter a load of commands to properly partition the key, and
format for the NTFS (did you know this stands for "New Technology File
System"?). In succession, enter the following-and type carefully, Jimbo!
Select Disk # (where # is the number of your USB disk. We typed
Select Disk 2 for this job)
Clean (this removes any existing partitions from the USB disk, including any hidden sectors)
Create Partition Primary (creates a new primary partition with default parameters)
Select Partition 1 (focuses operation on the newly created partition)
Active (sets the partition to active, informing the disk firmware that this is a valid system partition)
Format FS=NTFS
(formats the partition with the NTFS file system. This may take several
minutes to complete, depending on the size of your USB key)
Assign
(this gives the USB drive a Windows volume and next available drive
letter, which you should write down. In our case, drive "L" was
assigned)
Exit (quits the DiskPart tool)
4. Copy Windows DVD to a Desktop Folder 
Insert the Windows 7 installation DVD into your drive, and view the
files that it contains. Copy all of the files to a folder on your
Desktop. We put the disc contents in a folder named Windows 7.
5. Turn Your Key into a Bootable Device 
Now, go back to your command prompt, running it as an Administrator.
Using the CD command, navigate your way to the folder where you placed
the Windows disk ISO files. Your command line path should look something
like C:\Users\USERNAMEHERE\Desktop\Windows 7\ if you followed our lead
on folder placement. Now type the following commands:
CD Boot (this gets you into the boot directory)
Bootsect.exe /nt60 L: (this assumes L is the drive letter assigned to your USB key from the previous step)
In
case you're wondering, Bootsect infuses boot manager–compatible code
into your USB key to make it a bootable device. Also be aware that if
you're currently running 32-bit Windows Vista or 7, Bootsect will only
work if you use the files from the 32-bit Windows 7 install disc. The
Bootsect executable from the 64-bit version will not run in 32-bit
Vista. Don't forget it!
6. Load the USB Key with Your Install Files 
Copy all of the extracted ISO files into the USB drive. You don't need
to do this from the command prompt. Just drag and drop the files from
the Windows 7 folder into the USB drive using Windows Explorer. We also
recommend copying your hardware drivers onto the same key so the
installation wizard can find them.
Your USB key is now all ready
to go! Plug it into your target system and make sure you enter the BIOS
(typically by hitting F2 or F12) to temporarily change the boot order to
allow booting from the USB key before your primary hard drive or
optical drive. Now, when you plug the key into a machine, your system
should automatically begin speedily downloading setup files off of the
USB key and entering Windows 7 installation.
http://gizmodo.com/5523272/19-tips-every-windows-7-user-needs-to-know
