I have blogged earlier about creating a USB media for Windows 7 Installation. I recently found out, there is a better way!
Microsoft Store guys have Windows 7 USB/DVD Download Tool which makes creating USB media for installation easy.
The first step is to download and install the tool.
Once you do that, launch the tool and select source ISO file. Click next:
Next, select “USB Device” in media type:
In Step 3, select appropriate USB device from the list and click “Begin Copying”. Make sure your USB drive is empty or you have back up of data contained on the USB device:
Confirm erase operation. When you click “Erase USB Device”, it will format the device before copying the files to it. You should see the progress window while it copies the files to USB device for you:
Once the process completes, remove the USB, insert it on the computer where you need to install Windows 7 and start the computer. Make sure your BIOS can boot from USB devices and you select appropriate USB device that contains installation files when it boots.
You can find more details about this tool at Microsoft Store web site.
This process should work for Windows Server 2008 R2 as well.