Flash Drives Could be 'Key' for Win 7 on Netbooks
In case you haven't noticed, there's been a lot of talk about Windows 7 over the last couple of days thanks to Microsoft revealing retail pricing as well as discounted upgrades. As with previous versions of Windows, the next one will be delivered to consumers on optical media. This does pose an interesting problem – how do you easily install Windows 7 on a PC without an optical drive?
Installing via a USB device would be the easiest solution, with either a USB external disc drive or a flash memory stick. Such methods would allow Windows 7 to be easily installed into ultraportables and nearly all netbooks.
According to one of CNet's sources, Microsoft is considering offering Windows 7 on a thumb drive to allow netbook owners to more easily upgrade their machines. The story claims that Microsoft has said before that it is exploring ways to service PC users who are unable to use the optical disc to install Windows 7.
Another option involves Microsoft selling a downloadable version of Windows 7 that will enable users to make a bootable copy of the OS installer using their own thumb drives. Microsoft already sells a downloadable copy of Windows today, so that methodology could be extended into the upcoming version.
With nearly four months to go until Windows 7 hits store shelves, there's still plenty of time for Microsoft to work out the details. Stay tuned.

Netbook users must be really dumb if they don't know how to install software that comes on a disc. $40 buys an external burner easy.
So I support.
with WinSetupFromUSB http://www.msfn.org/board/install-USB-WinSetupF-t120444.html
It won't happen. How does the BIOS know you have an ISO on your hard drive? And how does it mount it with no capabilities to do so without booting the OS?
I've never had the need to use an external drive with my Aspire One. There are already programs out there that allow you to transfer a disc image to a bootable flash drive. Once the OS is installed, sharing the drive of another PC or transfering the ISO images and using something like Daemon Tools to mount them works fine.
Even though I only plan on installing Win7 on my regular desktop system, the download system sounds great. If you all you needed was an account of some kind and then you can just download the image to a flash drive any time you wanted that would be very convenient compared to a DVD that you can misplace, damage or forget to take with you.
This seems like one of those "its about time" kinda things.
wow! haven't you been on toms's recently? everyone knows win7 runs better than vista. Im surfing tom's on my win7 net book. setting up vista/ win7 on USB couldn't be easier, honestly. its XP that i still can't get on my netbook because it just doesn't like it.
For me, running the OS off the stick is even too slow for Linux. Give me RAID anyday.
For just installing though, why not?
That's the point, is 40$ and a thing to lugg around when you want to use it. "Ultra"Portables is the point, and saving money, not that M$ would ever do that though XD