It is always handy to install Windows using USB. Windows 8 (Developer preview) has inbuilt tools to create a bootable Windows 8 USB. However, you will need some help creating a bootable Windows XP VISTA or 7 USB.
There is a simple and easy way to accomplish that. WinToFlash is handy tool that will create a bootable USB with in couple of clicks. This Video will show the full instruction how you can achieve it. Full credit goes to IrtazaAhmedQureshi for creating the video.