Create a bootable Windows 7 USB Flash drive

What you need?
* 4GB USB Flash drive or greater
* Computer (See Specs required below)
* Internet Connection

Install POWERISO, If already installed, then skip this step.

1) Start POWERISO.

2) Click on TOOLS

3) Click on CREATE BOOTABLE USB DRIVE

4) Select your windows 7 ISO image under source image file.

5) Select your USB device under destination USB drive.

6) Select USB-HDD in write method under settings.

7) Click on START.

After few minute your Windows 7 setup is ready to use in USB.

Now you are ready to install your Windows.

8) Restart you pc

9) The start bios post message by click on DEL, F8, F9, etc.. {Change acc. to PC read on screen then click suitable button}

10) Go to boot section.

11) Click on disk priority and choose USB as first.

12) Save your setting and again restart.

13) Now your window setup is start choose suitable options and install your windows.

14) After completing Windows installation change your disk priority from USB to hard disk or just remove USB disk priority automatically change.

Enjoy!

Below is the alternative version from Microsoft Website

Overview

When you download Windows from Microsoft Store, you have two options: You can download a collection of compressed files, or you can download an ISO file. An ISO file combines all the Windows installation files into a single uncompressed file.
If you choose to download an ISO file so you can create a bootable file from a DVD or USB drive, copy the Windows ISO file onto your drive and then run the Windows USB/DVD Download Tool. Then simply install Windows onto your computer directly from your USB or DVD drive.
When you download the ISO file, you must copy it onto a USB or DVD. When you're ready to install Windows, insert the USB drive or DVD with the ISO file on it and then run Setup.exe from the root folder on the drive.
This allows you to install Windows onto your machine without having to first run an existing operating system. If you change the boot order of drives in your computer's BIOS, you can run the Windows installation directly from your USB drive or DVD when you first turn on your computer. Please see the documentation for your computer for information about how to change the BIOS boot order of drives.

Making copies

• To install the software, you can make one copy of the ISO file on a disc, USB flash drive, or other media.
• After you’ve installed the software and accepted the license terms that accompany the software, those license terms apply to your use of the software. The license terms for Windows permit you to make one copy of the software as a back-up copy for re-installation on the licensed computer. If you do not delete your copy of the ISO file after installing the Windows software, the copy of the ISO file counts as your one back-up copy.

If you need to download the software again, you can go to your Download Purchase History in your Microsoft Store account and access the download there.

Installation

To install the Windows USB/DVD Download Tool:
1. Click to open the Windows USB/DVD Download Tool page.
2. Click Download then Run.
3. Follow the steps in the setup dialogs. You'll have the option to specify where to install the Windows USB/DVD Download Tool.
You must be an administrator on the computer on which you are installing the Windows USB/DVD Download tool. It requires the Microsoft .NET Framework version 2.0 or higher.

System requirements

• Windows XP SP2, Windows Vista, or Windows 7 (32-bit or 64-bit)
• Pentium 233-megahertz (MHz) processor or faster (300MHz is recommended)
• 50MB of free space on your hard drive
• DVD-R drive or 4GB removable USB drive

For Windows XP users
The following applications must be installed prior to installing the tool:

• Microsoft .NET Framework 2.0 must be installed. It can be downloaded here.
• Microsoft Image Mastering API v2 must be installed. It can be downloaded here.

Using the Windows USB/DVD Download Tool

Before you run the Download Tool, make sure you have purchased the Windows ISO download from Microsoft Store and downloaded the Windows ISO file to your drive. If you have purchased Windows but have not yet downloaded the ISO file, you can download the ISO file from your Microsoft Store Account.
To make a copy of your Windows ISO file:
1. Click the Windows START button, and click WINDOWS USB/DVD DOWNLOAD TOOL in the ALL PROGRAMS list to open the Windows USB/DVD Download Tool.
2. In the SOURCE FILE box, type the name and path of your Windows ISO file, or click BROWSE and select the file from the OPEN dialog box. Click NEXT.
3. Select USB DEVICE to create a copy on a USB flash drive or select DVD disk to create a copy on a DVD disk.
4. If you are copying the file to a USB flash drive, select your USB device in the drop-down list and click BEGIN COPYING. If you are copying the file up to a DVD, click BEGIN BURNING.
When your Windows ISO file is copied to your drive, install Windows by moving to the root folder of your DVD or USB drive, and then double-click Setup.exe.