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There are various reasons for wanting to install Windows 7 from an USB drive. For instance, you may own a netbook which doesn't come with a DVD/CD-ROM.

To install Windows 7 from an USB stick (drive), we must firstly prepare the USB stick. For this, follow the steps below:

Go to Start > Run and enter: cmd.exe and in this window, type the following commands:

1. Diskpart
2. List Disk
3. Select Disk 1 (Replace 1 with number reflecting your USB Drive)
4. clean
5. create partition primary
6. active
7. format fs=fat32 quick
8. assign

Now, a drive letter reflecting the drive should appear. Copy the files from the DVD to the USB Stick (Simply drag and drop in Windows Explorer).
If you get errors along the way, simply remove the drive and repeat the process.

In order to boot from the USB stick, you need to modify the boot order in the BIOS of your computer. Accessing the BIOS menu depends on your machine. When you are done installing Windows 7, revert the setting to always boot from the hard disk.