• Plug in your USB stick
• Open Command Prompt with admin rights (Start -> enter cmd -> press CTRL-SHIFT+ENTER and click Yes at the UAC prompt)
• Run Diskpart by typing diskpart and press enter
• Now type List disk (and press enter). My USB stick is Disk 2.
• Enter the following commands, where I assume that your USB stick is also Disk 2. If your USB stick is Disk 5, just use Disk 5 instead of my Disk 2! Enter the following commands one by one, each followed by Enter:Select Disk 2

Clean

Create Partition Primary

Select Partition 1

ActiveFormat FS=FAT32 (depending on the size of your USB stick this can take a moment)

Assign

Exit* Now copy the entire content of your Windows 7 DVD (or Windows 7 source folder, if you extracted the ISO) to the root of your USB stick.

• Now we still have to make the USB stick bootable. Note: If you are currently running a 64-bit OS and the source (on the USB stick) is 32-bit, you can't run the following command. Just be sure the source (on the USB stick) and the currently running OS are of the same type!
• In the Command Prompt (which you didn't close, I hope) type P: (the drive letter of your USB stick) followed by Enter
• Type CD\Boot followed by Enter
• To create a bootsector on the USB stick enter Bootsect /NT60 P: (your USB drive letter) followed by Enter.
• Reboot your PC and change the boot order (in the BIOS) if needed, so the USB stick is first in the boot order.