Is it possible to create a usb bootable version of Windows 7 just like ubuntu??
I mean boot the actual operating system and not the installer from a usb?
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This is normally used to create Live CD's, but you can achieve the same result using a USB stick.
Here's an example of a BartPE installation for Windows XP
Note that the performance is likely to be pretty crappy unless you use a really stripped version of Windows.
For steps on how to do it: here's a tutorial