To do this you can use Microsoft's official tool: Windows 7 USB/DVD Download Tool - Free software downloads and software reviews - CNET or alternatively use UNetbootin: UNetbootin - Homepage and Downloads

UNetbootin is usually used to install Linux distributions such as Ubuntu but can also be used to "burn" ISO files to USB flash media.

Simple How-To but important nonetheless .

Note: If UNetbootin doesn't work, try WinToFlash: WinToFlash - Install Windows from usb - Home page (if you use WinToFlash, ISO files need to be virtually mounted first as a virtual disc drive for the files to be transferred to a USB drive -- use UltraISO for that)