What happens next?

How to install windows 7 using pen drive
Create an iso from your installation disc (if you have one).
The easiest way to create an installation usb drive is to use an iso, or disc image, of your windows 7 installation disc. If you have your disc, you can create your own iso in just a few minutes.
If you don't have your windows 7 installation disc, see the next step. Insert the windows 7 installation disc into your dvd drive.