WinToFlash is an application that allows you to transfer Windows XP, Windows Vista, Windows 7, and also Server 2003 and 2008 from the CD / DVD to a USB / Flash Drive. Also easy to use, to create a USB Bootable you can just follow the "Windows Setup Wizard transfers"
Previously I had post a Freeware: A bootable USB. However, freeware is not able to make a Bootable USB Windows XP. So now you can use WinToFlash
Win To Flash though is Freeware but in constant development by the developer. The latest version is currently in Beta and is also a portable application. In our tests using USB 2.0 it took about 12 minutes to change the installation DVD of Windows 7 to be a USB-based installer.
Download : Win To Flash