Essential things:
1. A USB flash drive with a smallest of 4 GB space
2. Windows 7 bootable DVD
3. Windows XP bootable CD/DVD
Procedure:
1. Connect the USB flash drive to your Windows machine and move data present on the USB flash drive to a safer locality.
2. Download WinSetupFromUSB Zip file, extract the contents to desktop. Open the folder, right-click on WinSetupFromUSB (.exe) file and select Run as administrator choice.
3. Once the tool launch, choose the next options:
# Removable
# Windows will be installed in \WINDOWS
Too make sure that your USB flash is shown in USB Disk Selection box. Once you are done with the above mention tasks, click RMPrepUSB button.
4. This will open RMPREPUSB tool. In this tool, you will need to allow the under mention options.
A. Prove that your USB flash drive is selected in the first box
B. Under Boot Options, select XP/BartPE bootable [NTLDR]
C. Under File System and OverRides section, select Boot as HDD (C:2PNST), and NTFS options
D. Select File �> USB option in Image Tools box
At last, click Prepare Drive button to see a note from the tool. Click Ok button. Click Ok button on the next computer screen as well.
5. Wait for a few minutes till you get a Command Prompt note saying �Operation Completed�.
6. Close the PREPUSB tool.
7. Put in your XP CD/DVD into the optical drive. In the WinSetupFromUSB tool, click Browse button next to Windows 2000/XP/2003 Source box to browse to the XP installation files present on your CD/DVD. otherwise, if you have the XP installation files on a local drive, you can browse to that folder.
8. Click Go button and wait for a few minutes to see the next screen:
Click Ok button. Remove the XP CD/DVD from the optical drive and put in Windows 7 DVD.
9. Choose Vista/7 setup/PE/RecoveryISO option and browse to the Windows 7 installation files folder. Finally, click Go button. Please note that this operation may take hours. Don�t close the application if you see �Not Responding� message in the title bar.
10. Wait for the Done note previous to you click the Exit button.
11. Now, it�s time to download one smaller file named Bootfiles from here. Extract the inside to desktop. Copy menu.lst and winsetup.lst files to the USB flash drive and restore the old files with new ones. Click Copy and Replace option when you are provoked with the Copy File message.
12. Your multi-boot USB flash drive is complete. Reboot your machine and start installing XP or Windows 7 from the USB.
Note: When you choose Windows XP setup in the boot screen, you will see two options:
First part of Windows XP setup
Second part of Windows XP setup
You must choose the first part of Windows XP setup, but on the next restarts you select the second part of the setup.