In order to install Windows 7 from a USB drive, while you are running XP, you will need a pen drive. You will also need a Windows 7 DVD and a pen driver.
Download a replacement utility. Google ‚ÄúMbrWiz‚Äù. Download it. Place it in a non-Windows drive. Look up the disk number in your command prompt window, when you have downloaded it. Set it as ‚Äúactive‚Äù, and confirm it. Insert your Windows 7 DVD in your drive.
In your command prompt window, search for the number of your pen drive. Copy your files to your pen drive. Set your pen drive to the highest priority. Restart Windows. Boot your pen drive. This will give you a bootable pen drive.