This is something that used to drive me crazy and probably still would had I not simply taken a few minutes to think a little bit about my options.
The scenario was simple Windows 7 RC from Microsoft's website as an ISO installing onto an Acer Aspire one with NO CD DRIVE!
So I had to go down the USB root, well the answer is actually really simple,
Firstly make sure your external drive is formatted as NTFS then secondly go into computer management (Right click My Computer and Click Manage) and right click your disk.
You then see an option (Set as Active) this will set the partition as Active as it states (Which also means bootable).
Copy your ISO onto the drive and boot, hoorah!
I think this is limited to Vista though...not sure anyone willing to try this on XP please let me know how this goes..
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