When download completes, you will need to write or 'burn' the ISO image and boot from a bootable media. You already know how to use Rufus, just select the Windows 7 ISO image! When ready with the USB drive: Please, shutdown the computer using the power button. Insert the Windows USB thumdrive prepared previously. Power on the PC.

Note : This article was written when Windows 7 was still in BETA 1, changes might occur later to the product once it is RTM.

Update on 24/Oct/2009 : Check my new article Using The Windows 7 USB/DVD Download Tool. Now you can use a tool to create a bootable USB Device.

First we will need to mount the content of the Windows 7 DVD ( or the ISO file ) to the external Flash Memory. Open Command Prompt ( cmd ) and write the following commands:

To open Command Prompt , click on Start > All Programs > Accessories > Command Prompt

Type diskpart

Type list disk , with this command , all hard disk attached to your machine will be listed. My machine internal Hard disk is 75 GB and my flash memory is 8 GB, as shown below :

My USB Stick sown above with a Disk ### as Disk 1, so type select Disk 1

Type clean, this will clear the configuration information, or all information, off the disk.

Then type create partition primary

select the partition by typing : select partition 1

Set it as active by typing : active, this will mark the current basic partition as an active boot partition.

Format the partition with a Fat32 File System by typing : format fs=fat32

Assign a letter to the flash disk, type assign letter=v , where v is a free drive letter

Exit Diskpart by typing : exit

Now we need to copy the Windows 7 Installation files to the USB Stick.
Type xcopy d:*.* /s/e/f v:
where d is the drive letter of the DVD drive that holds the Windows 7 DVD, or the Drive letter of the path that you are saving in it the ISO file of Windows 7, and v is the drive letter that you assigned to the external USB Stick in the previous step.

Plug the USB stick to the machine you want to install Windows 7 to, and reboot/or start it up. Make sure that USB booting is set in the BIOS prior to your internal hard disk.
Once booted, an animated logo for Windows 7 will be displayed and below it will show you that Windows is starting

Once it loads, choose your preferred language settings and then click Next

Click on Install now to start installing Windows 7 .

On the License Terms page, if you are from those people who don't just click Next on such pages ( who does not ), under installation, you will notice that you may install and use as many copies of the software as you want, and that the software will stop running on the 1st of August 2009 ( Reminder : This is Public Beta 1 of Windows 7 ) . Accept the license terms by selecting the checkbox beside I accept the license terms, and click Next.

On the installation type page, click on Custom (advanced) to start a new installation
I was running the setup on a blank hard disk that had no OS loaded on it before. so I was wondering why the Upgrade option was active and not grayed as it used to be when I used to install Windows Vista or Windows Server 2008 on blank Disks !! I tried it and received the below message !! OK, I believe this should be fixed, as with Vista installation, the installer would gray this option out !!

Choose the partition or disk that you want to install Windows 7 on, and then click Next

Installation will start
The machine will reboot later and will start updating registry settings
and then setup will be starting services
We will be back to the installation page, completing installation
computer will be rebooted to continue installation

setup will prepare computer for first use

Setup will continue, and this time you will have to choose a username and a computer name
when you enter the username, the machine name will be automatically chosen as username-PC , if you do not wish to have this name for your machine, then simply change it and then click Next

Then you will have to enter a password for your username, In this page, I didn't like one thing, which is forcing me to provide a password hint if I have chosen to insert a password, as I usually do not like to provide password hints, I decided to leave the password empty ! and clicked Next

On the Product Key page, you can either enter the product key or simply leave it empty and click on Next.

On the recommended settings page , choose your settings and click Next

Select your Time Zone and set your Time and Date settings, then click Next

Setup will start to finalize and prepare desktop
And finally, Windows 7 desktop will be displayed.

It will need your Windows 7 product key and a blank USB flash drive. Make USB bootable. Insert the USB flash drive, run Command Prompt window as an administrator. Type “ diskpart ” and press Enter. Type “ list disk ” and press Enter. Enter the following commands one by one and wait for each step to complete.
Go to the Windows 7 Service Pack 1 download page on the Microsoft website. Select Install Instructions to see which packages are available for download, and make note of the one that you need. Select the appropriate language from the drop-down list, and then select Download. Select the packages you need to install, select Next, and then follow.

Summary
Instead of wasting a lot of DVDs, specially if the product is still in Beta and will have lots of releases in the next few months, why not start using a flash memory to hold Windows 7 installation files, so that when a new Windows 7 or 2008 R2 build is released, simply delete the contents, rerun the xcopy command and you are ready to go again.

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Here's how to create a bootable Windows installation USB drive starting with a Windows .iso file or a Windows Setup DVD.

Tip

If you're looking for an easy way to create a bootable USB Windows installation drive, use the media creation tool.

What you need

Windows 10 install .iso or DVD
USB flash drive with at least 5GB free space. This drive will be formatted, so make sure it doesn't have any important files on it.
Technician PC - Windows PC that you'll use to format the USB flash drive
Destination PC - A PC that you'll install Windows on

Step 1 - Format the drive and set the primary partition as active

Connect the USB flash drive to your technician PC.
Open Disk Management: Right-click on Start and choose Disk Management.
Format the partition: Right-click the USB drive partition and choose Format. Select the FAT32 file system to be able to boot either BIOS-based or UEFI-based PCs.
Set the partition as active: Right-click the USB drive partition and click Mark Partition as Active.
Note
If Mark Partition as Active isn't available, you can instead use diskpart to select the partition and mark it active.

What you need

Step 1 - Format the drive and set the primary partition as active

Step 2 - Copy Windows Setup to the USB flash drive

How To Install Windows 7 From Usb Free Download