Well there are several ways to accomplish this. In this post I used a freeware tool from Microsoft.

This tool will let you create a bootable DVD or USB stick based on a ISO image.

Just download and install the tool from:  http://images2.store.microsoft.com/prod/clustera/framework/w7udt/1.0/en-us/Windows7-USB-DVD-tool.exe

After installing start the program from the start menu:

Then follow the steps in the wizard:

Don’t forget to set the USB stick as first boot device in the BIOS.