Windows 7, or any operating system for that matter is required to be installed by burning the .ISO file to a blank DVD or a USB thumb drive.
If you are going to burn the .ISO onto a USB, download the following tool named Rufus: HERE
Step 1: Download and run the Rufus tool, make sure the USB is already plugged into the machine. Download Rufus: HERE
Step 2:Next, you will have to make sure you choose the ISO image to burn to the USB device. Once you run Rufus you'll see under "Drive Properties" it will say "Device", make sure your USB is showing on there. Then under "Boot Selection" make sure it says "Disk or ISO image (Please select)" and to the right of it will be a "Select" button. Click that and locate your Windows ISO image (usually in the downloads folder of the computer). Once the ISO is selected click “Start” and the burning will begin.
Step 3: Once clicked on, you will have to locate the ISO (usually in the download folder of the computer). Once the ISO is selected you will be able to click the disk icon on the bottom left of the program and the burning will begin.
Step 4: After burning the .ISO image to a blank DVD or a USB thumb drive go to that device in question and inside click the file that is named “Setup”. Click on 'install now'
Step 5: Choose the Type of Windows 7 Installation to Complete: Click on the Custom (advanced) button.
Step 6: Show the Windows 7 Advanced Drive Options
Step 7: Wait While Windows 7 is Installed ( the machine will restart several times )
Step 8: Wait for Windows 7 Setup to Complete
Step 9: Enter the Windows 7 Product Key
Step 10: Your Windows 7 install from XP is Complete!