Installing Windows from a USB drive is supposed to be faster than installing from a CD/DVD.
To load a Windows ISO file onto a USB drive requires formatting the drive, two out of three online descriptions of the process require formatting the drive as NTFS.
USB flash drives by default are set to 'optimize for quick removal' in Win XP (properties, policy tab) - which means you can't format the drive as NTFS.
Change the mode to 'optimize for performance' to allow formatting the drive as NTFS.
This default causes the Microsoft Windows 7 USB/DVD Download Tool to fail to format the usb drive as bootable. And when I tried to boot my PC I got the error message "NTLDR is missing".
When using the Microsoft Windows 7 USB/DVD Download Tool to create a bootable flash drive - there is no indication that the formatting failed - it just doesn't boot properly.
But changing the properties of the drive first seems to do the trick...
Two days later... Apparently when I try to format a drive it may require loading bootsect.exe into the directory of the ISO Tool. Here is where I found it:
Thanks for the posting!