Install Windows 7 from USB
 

Since Windows 7 ISO size is around 2.24 GB so its obvious that you will need to burn windows 7 iso on DVD and another issue is you can’t start windows 7 installation by mounting ISO file on windows XP as Windows XP upgrade to windows 7 is not allowed. In such situation installing windows 7 from USB pen drive is feasible solution.

Here is small guide on how to install windows 7 from USB flash drive or USB pen Drive for Windows XP users.

http://www.blogsdna.com/2016/how-to-...-7-iso-dvd.htm

Do note that at step 5:

the command
mbrwiz /disk=X /active=X (X is Disk Number of your USB Drive)

should be:

mbrwiz /disk=X /active=1 (X is Disk Number of your USB Drive)

if you want to make a bootable CD for the 64b version, you'll need the 32-bit Windows 7 bootsec.exe mentioned in step 6, you can find the 32-bit version here: http://www.2shared.com/file/2585881/.../bootsect.html (tested it for virus at http://virusscan.jotti.org/ it's clean);

works as a charm; 4Gb USB stick is all you need