Microsoft has re-posted the USB/DVD download tool after it was discovered it contained GPLv2 code.
Installing Windows 7 on a netbook can be a daunting task. The lack of DVD drive can make even the most skilled geek feel inadequate and mortal. The only real way to plug external data into a netbook is via its USB ports. Now these handy lil' ports would be great, assuming Windows 7 actually came on bootable flash drives. Sadly, Microsoft hasn't decided to take that route. Instead, you're stuck scratching your head, googling (or binging, whichever) the best way to turn your flash drive into an installation disc.
Preparing a flash drive for use as an installation disc isn't as easy as simply copying over all the files from your Windows CD. First you have to format it, then create a primary partition, make it bootable, and then finally, copy over all the files from your installation CD.
With Windows 7, Microsoft has decided to change all this. As pointed out on Tom's Hardware, Microsoft has officially released a Windows 7 USB/DVD Download Tool. This open source program will make the process of installing Windows 7 on a netbook much easier than described above. Once you have a Windows 7 ISO file on your computer, plug in a USB flash drive (4GB+ should do), run the tool, and follow the instructions. Once the tool is finished, you'll have a working, bootable, Windows 7 USB drive.
Download: Windows 7 USB/DVD Download Tool