Vista and Windows 7 DVDs include a utility to make a USB hard drive bootable so you can install from them.
The command for this is:
E:\boot\bootsect.exe /nt60 F:
where E is the DVD drive, and F is the hard drive that you want bootable.
Once you’ve done this, you can copy the contents of the DVD to the USB hard drive, and install from that. Great for when you didn’t buy a SATA DVD drive for your new computer 😀