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HOW-TO: Install Windows 7 Using a USB Flash Drive
On an earlier how-to, was posted a tutorial on how to unify Windows 7 x86 and x64 installers into one DVD (or one DVD image). However, not all computer systems nowadays come with an optical drive -- like the DVDs or the more advanced Blurays -- but most computer systems have USB ports.
Even though the desktop comes with an optical drive, one could not deny the fact that USB ports transfer data faster than optical drives. If so, then why not create an installer that plugs on the USB port right? That is indeed a good idea.
This procedure requires the following items (only one of the items marked by ** are required):
Another thing to note here, is that this procedure can be done for any of the following sources: Windows 7 x86, Windows 7 x64 or the unified installer for both x86 and x64 Windows 7.
Follow the procedure below:
 Prepare a USB flash drive (UFD). Format it to NTFS. If the option for NTFS is not available, perform any of the following: using diskpart or tweak the unplug policy. For some strange reason, the installer requires an NTFS filesystem. I tried this on FAT32 and the installer will not work but does on NTFS.
 If you still have the D:\WIN7 directory structure from the older tutorial, simply copy the contents of D:\WIN7\x86\ over to the UFD.
 If you have the individual Windows 7 x86 or Windows 7 X64 installers, copy the contents of the DVD (or ISO) to the UFD.
 Open a command prompt as Administrator. Change directory to the \boot of the DVD or if using the unified installer D:\WIN7\x86\boot. Execute "bootsect /nt60 G:" (like below).
 You now have a USB capable of installing Windows 7. Try it out on another machine and prove to yourself the improvement in speed when installing from UFD.
USB install is versatile and fast. Not only that, our previous procedure unifying the installers can be put to a single 4GB USB flash drive. Another upside to this is carrying a UFD is much better than carrying a DVD -- it can even fit in your pocket!