Though I did things manually and installed Windows 7 (Copied the ISO’s content to a USB stick then installed from there), this would be a good thing to do as well…
WinToFlash can transfer your Windows XP\VISTA\7\Server 200(3\8) to a flash drive and let things install easily from there…
The process shouldn’t be hard, there’s wizards and stuff (Beware of OZ)…
Click here to read the related LifeHacker post.