Five steps to create a Windows 7, Windows Vista, Windows 2003 server and 2008 Server bootable USB flash drive.

Microsoft released a free tool called Windows 7 USB/DVD Download Tool to create bootable USB flash drive in simple steps.

Before you run the Windows 7 USB/DVD Download Tool, make sure you have already purchased the Windows 7 ISO download from Microsoft Store and have downloaded the Windows 7 ISO file to your hard drive. If you have purchased Windows 7 but have not yet downloaded the ISO file, you can download the file from your Microsoft Store Account.

To make a copy of your Windows 7 ISO file:

1. Click the Windows Start button, and click Windows 7 USB/DVD Download Tool in the All Programs list to open the Windows 7 USB/DVD Download Tool.
2. In the Source File box, type the name and path of your Windows 7 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 7 ISO file is copied onto your chosen media, install Windows 7 by moving to the root folder of your DVD or USB flash drive, and then double-click Setup.exe.

This same tool and method is applicable for creating bootable USB flash drive for Windows Vista, 2003 server and 2008 Server