http://pbatard.github.com/rufus/
This is what I use.
I don't like putting W7 on a multiboot key, I have other tools on that instead, using YUMI
You can get the win 7 ISO's from the link below,
http://www.mydigitallife.info/download-windows-7-iso-official-32-bit-and-64-bit-direct-download-links/
Or the win 7 ISO's with SP1,
http://techdows.com/2011/07/download-windows-7-integrated-with-sp1-iso-official-direct-download-links.html
wintoflash does this too. All you need to do is stick in the DVD and choose the drive letter for it and then the drive letter of the USB and let it do its magic.
It works... Used it several times with no problems.that microsoft tool sucks