How to Create a Windows 7 System Recovery USB Flash Drive

Follow this instruction bellow How to Create a Windows 7 System Recovery USB Flash Drive. If you do not have a DVD drive, if you have a DVD drive, you can use an existing Windows 7 Installation DVD or a Windows 7 Recovery Disc when at step seven.

Using a Windows 7 Installation DVD at step seven will also allow you to install Windows 7 via USB, not just recover a damaged system; very useful if you have a netbook!

• Open a command prompt with administrative rights. To do this, click Start > All Programs > Accessories and then right click Command Prompt, followed by clicking Run as administrator.
• After accepting any UAC verification questions, you should now be at the command prompt. Make sure your USB flash drive is plugged in and then type DiskPart, followed by pressing Enter.
• Type List Disk and then press Enter. Determine which disk number corresponds to your USB flash drive. In the following scenario, Disk 1 corresponds to our USB drive since we know our USB drive has a capacity of 2-gigabytes.
• Enter the following commands in order, changing the disk number to the disk number listed for your USB drive.  Warning - the following commands will erase everything on your USB drive or the disk you select.

            Select Disk 1
            Clean
            Create Partition Primary
            Select Partition 1
            Active
            Format FS=NTFS

• After DiskPart successfully formats the USB drive, which might take a few minutes, you will want to enter the following commands:

            Assign
            Exit

• You will now need to copy the contents of the ISO image you downloaded, or the contents of a DVD you wish use, to the USB flash drive.  There should be two folders and a file in the ISO image that need to be copied. To extract the files contained within an ISO image, you will need to use a program such as WinRAR.

• Now that the files are copied, we will want to make the USB drive bootable. To accomplish this however we will need to download a small file called bootsect.exe; it can be downloaded from here. The file can also be found in the boot directory of the Windows 7 Installation DVD.  Once downloaded, place the bootsect.exe file in the root directory of your USB flash drive.

• Back at the command prompt, we will want to change the current directory to that of the USB drive and run the bootsect command. In our case this is drive E, so we will be using the following respective commands:

          e:
          bootsect /nt60 e:

The bootsect command will update the target volume with a compatible bootcode. If all goes well, you should now have a bootable USB recovery drive; just remember to add the USB drive to the boot list in your system's BIOS for it to work upon start up.

source