Okay, this is not new. In fact this is old news. The reason I am writing about it because there are so many bogus tots out there. This is the right way to make a bootable thumb drive and put XP, Vista, Windows 7, Windows Server 2008, Windows Server 2003, and more on it.
Format your drive with Fat32, or NTFS is you can.
convert X: /fs:ntfs (x is your thumb drive)
Now run mbrwiz
mbrwiz /list (get your drive number of the thumb drive)
mbrwiz /disk=X /active=1 (x is your disk)
Now mount the OS installer disk onto a virtual disk, use freeware if you want
open another cmd window and browser to your mounted image
E: (E: is your mounted img)
bootsect /nt60 X: (X is your drive)
Now copy all the install files from the disk to the thumb drive. Use xcopy or just windows explorer if you want. Boot!
Alternatively you can use DISKPART without installing anything
SELECT DISK X
CREATE PARTITION PRIMARY
SELECT PARTITION 1
Now continue with CD BOOT….