Many of the linux distro's allow you to create a usb flash version of the distro. It can then be used to install.
You don't need a utility to do the same with windows 7. They made this into a video but don't know why. http://technet.microsoft.com/en-us/e...ng-a-usb-stick
I get the feeling that you have some odd install issue going on. I suspect it is the windows deal. Start all over from an unpartitioned drive.
Be SURE that you don't need any info on the drive such as a recovery partition.