[Nexus 7 Q&A, Help & Troubleshooting] comminus:
As good as toolkits can be, I recommend using adb and fastboot directly. This will allow you to see what is happening every step of the way and is a good opportunity to learn. The following instructions assume some basic Windows command prompt skills.

Read all the directions before you begin and perform the steps at your own risk.

I want to assume that you have the correct drivers installed, but I wont. This and any following verbosity is not to be condescending, but rather not to assume anything. If you're certain the adb and fastboot drivers are correctly, skip to step 7.

To obtain the tools and drivers needed, download the Android SDK - http://developer.android.com/sdk/index.html

Run the SDK installer that you downloaded and follow the on-screen instructions.

Make note of the install location which defaults to: C:\Users\<user name>\AppData\Local\Android\android-sdk this is where the tools and drivers will be downloaded to. This will be referred to as your sdk directory

Note: Java SE JDK is required by Android SDK. Download and install the Java SE JDK from Oracle

Run SDK Manager.

Under Tools, check the box labeled "Android SDK Platform-tools" - this provides adb and fastboot

Under Extras, check the box labeled "Google USB Driver"

Press the "Install # Packages..." button and follow the on-screen instructions.

Install the abd driver - detailed instructions can be found at http://developer.android.com/tools/extras/oem-usb.html

Note: in order for your device to be detected, USB debugging must be enabled on the device

Once the driver is installed open a command prompt and change directories to <your sdk directory>\platform-tools (see #2). From the command prompt run "adb devices". This will list any adb-capable devices that are attached to the computer by their serial number assuming your drivers are installed correctly. Recap:

> cd \Users\<user name>\AppData\Local\Android\android-sdk\platform-tools
> adb devices
# the following output should be returned
List of devices attached
<device serial number> device

Use adb to boot the device to the bootloader:

> adb reboot-bootloader

The device should now be in fastboot mode and Windows should be attempting to install the fastboot driver. You can verify that the driver has been installed by running the following command:

> fastboot devices
# the following output should be returned
<device serial number> fastboot

Download the factory image for Nexus 7 from https://developers.google.com/android/nexus/images#nakasi. The resulting file will have the extension .tgz. You will need something that can reliably decompress and extract files from this archive. If in doubt at all, use 7-Zip http://www.7-zip.org/download.html.

Open the archive with 7-Zip you should see a single .tar file. Open the .tar file with 7-Zip as well.

Inside the .tar file is a directory that will resemble "nakasi-jro03d". Open that directory.

Extract the contents of the "nakasi-jro03d" directory to <your sdk directory>/platform-tools. The extracted files should be as follows: bootloader-grouper-3.34.img, image-nakasi-jro03d.zip, flash-all.sh, flash-base.sh

The flash-all.sh file is a shell script that contains all the commands required to flash the factory image using the fastboot command. In order to use fastboot, we need to boot the device to fastboot mode. This can be done with adb:

> adb reboot-bootloader

In order to do anything useful, the bootloader must be unlocked. Do that like so:

> fastboot oem unlock

Follow the directions on the device, using the volume and power buttons to select "Yes".

In fastboot with your device's bootloader unlocked, run the commands listed in flash-all.sh in sequence, waiting for each command to finish. For convenience I have them here:

> fastboot erase boot
> fastboot erase cache
> fastboot erase recovery
> fastboot erase system
> fastboot erase userdata
> fastboot flash bootloader bootloader-grouper-3.34.img
> fastboot reboot-bootloader
> fastboot -w update image-nakasi-jro03d.zip

# optionally re-lock the bootloader.
# You may want to do this if you're returning the device for warranty work.
> fastboot oem lock

# finally, reboot
> fastboot reboot

That should do it.