I recently had the need to install Windows 7 onto a Zotac ZBox ID-83-U PC. This is a small machine, and it has no DVD drive. It does have some USB slots, and not wanting to order an external DVD drive, my only option was to install from a USB thumb drive.
To do it, I needed a couple of things: the Windows 7 DVD needs to be an ISO file, and a utility to make a bootable install disk from the ISO file.
If you prefer to do this by hand, MaximumPC has some good instructions here: How To: Install Windows 7 from a USB Key!
If you wish to do a uEFI installation, you’ll need to prepare the USB thumb drive differently. Instructions how to do that can be found here: Windows 7: UEFI (Unified Extensible Firmware Interface)