Installing Windows 7 on netbooks with no optical drive

This is based on information I found here, but modified slightly to a nicer process, in my opinion :)

The problem is that installing Windows 7 (Beta and RC confirmed, RTM likely to be the same) requires a DVD drive, which many netbooks don't have. The good news is that you can still install it to these computers (assuming they meet the minimum requirements), you just have to make your own bootable media. Here's how: (Note I've done this on an Acer Aspire One netbook, but the steps are similar for other computers).

Step 1 - Download or acquire the Windows 7 iso or DVD. I personally like burning the ISO to DVD, rather than mounting it, but if the only computer you have is your netbook, you'll clearly need to download the iso and mount it without burning it. For burning the ISO on XP and Vista, I recommend the ISO Burner Powertoy. If you're running a flavor of 7 already, it's got native ISO burning capabilities. If you're going to just mount the iso as a drive directly, you'll need something like Daemon Tools (and you need to be somewhat of a geek to follow their instructions).

Step 2 – We need a device the computer can boot from. I've had better luck with SD cards rather than USB drives, personally. The specific one I've used was a 16GB Micro-SD card in an SD adapter, but I've also loaded up an 8GB SD card I got for $25 (see my previous post about the Wii menu upgrade and the card I got for that), and it worked too. Regardless, you need a drive BIGGER than 4GB. Note not all computers can boot from SD cards, though...make sure you confirm your computer's boot options. I used an Acer Aspire One netbook though, and it can boot from SD.

Plug the drive into a computer (I recommend a computer other than your netbook so you can use the Windows 7 DVD physical media, but it's up to you).

Format the device you want to boot from to get it all nice 'n clean. I recommend a quick format with NTFS file system, but I've heard Fat32 works as well. You can do this by right-clicking the drive in My Computer and choosing "Format", or by following the diskpart instructions at the page I got the original instructions from (linked to at the beginning of this post).

Open a command prompt as administrator. In Vista and 7, click start, type in cmd, then hold ctrl and shift while pressing enter (or right-click the cmd that appears in the search results and choose "Run as Administrator". In XP, you just need to be using an account with administrative privelages.

Navigate to the boot directory on your Windows 7 media:
cd E:\boot
(where E:\ is the mounted ISO or the DVD drive containing the Windows 7 disk)

Using bootsect, we’ll make the USB/SD media a bootable NTFS drive, ready for a Windows 7 image (my drive was labeled G):
bootsect /nt60 G:
If it gives an error about not being able to get a lock on the media, eject the media, maybe reboot the computer, and try again. If it returns "Access Denied", you're not running the command prompt as an administrator.

Step 3 – Copy the installation files from the Windows 7 disk or mounted ISO to the USB drive.
I like using xcopy to make sure I get everything:
xcopy e:\*.* g: /e /h
(again, my DVD or mounted ISO drive is e: and the USB/SD drive is g: in this example)

We're done with the command prompt now, so you can close the window or type Exit.

Step 4 – Begin installation on the Netbook
Plug in the USB/SD drive and turn on (or restart) the netbook
On start up press F12 to select the bootable drive (or if that option doesn't show up, press F2 to enter setup and turn on the option to allow F12 to show boot options).
Select the USB drive and press return
The netbook will boot from the USB drive, and prompt you to press any key to boot from cd or DVD. Press something (I like pressing enter or space) and setup will begin. From this point forward, if you see it prompt you like that again, do NOT press anything...you only want to boot from the DVD media at the beginning of the setup.

Step 5 - Installation
Now, if you want to install to the netbook and overwrite what's currently on your computer, you can proceed with the prompts as normal...it's pretty easy, even for a non-geek. (But I recommend doing a "Custom (advanced)" installation, NOT an upgrade installation). If that's the case, you can skip the rest of this post...congratulations!

However, if you want to dual-boot your computer using the VHD capabilities built into Windows 7, continue below:

When the Welcome to Windows 7 screen comes up with a button to "Install Now", press Shift+F10. A command prompt will open.

Type diskpart and press enter

Wait a minute for it to get to the diskpart> prompt. Now type:
create vdisk type=expandable maximum=80000 file=c:\Win7.vhd
to create a virtual hard disk file in your C:\ that can hold up to 80 GB, but will only be as large as you need (that is, it will start off as kilobytes, then expand the file as you add things to the virtual hard drive, up to a maximum of 80GB).

It should complete that very quickly. Now type:
select vdisk file=c:\Win7.vhd

Again, that should return immediately. Now type:
attach vdisk

When that's done, type exit, press enter, then type exit and press enter once more. The command line should be closed now. Go ahead and click the Install Now button in the Windows 7 installation routine. When it prompts you for what partition to install to, choose the 78GB (or so...it's not exactly 80GB) partition. It will warn you that Windows cannot be installed to this partition, but ignore that warning, it will work just fine, thank you very much.

Continue installation as normal.

Step 6: renaming the dual-boot options (useful if you have multiple Windows 7 VHDs installed, or if you are dual-booting with XP, which will be labeled only, "Previous version of Windows"). Totally optional...requires a higher level of geek.

Once you're in Windows 7 at the desktop, open up the command prompt as an administrator again. Type: bcdedit

It will list all your boot options. If you have XP as one of the boot options, you'll see one with {ntldr} as the identifier. If you want to rename that to something other than "Earlier version of Windows", (say, Windows XP) you can type in:
bcdedit /set {ntldr} description “Windows XP"

Otherwise, look for the identifier string for the option you want to rename. The one you're currently in will usually be {current}, while a different inactive Windows 7 or Vista installation might either be identified by {system} or by a really long string of random letters and numbers between curly brackets. DO NOT rename {bootmgr}...don't even touch this one. Once you've found the one you want to rename, use the same command as above, but replace {ntldr} with the identifier of the option you want to rename (including the curly brackets), and "Windows XP" with whatever you want the option to read (for instance, I've got "Windows 7 beta" and "Windows 7 RC" as two options on my computer).