There is a utility to install Windows Vista or 7 in a system using a bootable USB drive which can be used to install Windows without using DVD drive.
This utility automates the task of installation of Windows.Aris@ AskVG has created this utility which creates a bootable USB drive to install Windows Vista, Server 2008 or 7.It works with both 32 bit & 64 bit Windows Versions.

Requirements :

• A USB Drive (4 GB or more)
• Windows Vista, Server 2008 or 7 ISO image or DVD
• Host OS: Windows Vista (SP1 or SP2), Server 2008 or 7

Its a portable utility so doesn’t need installation. Simply run it & Use it.

Download Link (Rapidshare)

Download Link (Mediafire)

Download Link (Skydrive)