This is microsofts support/requirements needed for USB boot devices:
http://www.microsoft.com/whdc/archive/usbcompat.mspx
Recommendations for booting Windows from USB devices:
http://www.microsoft.com/whdc/device/storage/usb-boot.mspx
It is possible to boot to windows from a USB device.
First, there are a few system requirements that must be clarified:
-Obviously, your computer's BIOS must allow booting from a USB device. Most recently manufactured computers allow this functionality.
-You'll also need a bootable floppy disk or CD. For example, you can use a Windows 98 CD or a Dell Resource CD.
-You will also need a utility with the ability to create a master boot record, create and set active partitions, and format and transfer boot files. The DOS fdisk and format utilities that are present on the Windows 98 CD will handle this perfectly.
-A USB drive that is capable of being made bootable. There are a few that have strange partition structures that do not allow for making bootable partitions. Contact the manufacturer if you're not sure your USB drive is bootable.
How to actually make the drive bootable:
-Make the USB drive the first drive in the drive sequence. This is necessary because fdisk will not allow a partition to be active (bootable) unless it's the first drive. This can usually be accomplished by plugging the drive in, powering on the computer, and going into the BIOS to change the boot sequence. If this is unsuccessful, simply disabling or unplugging the other drives in your system (except the CD-ROM, of course!) will do the trick.
-Boot the computer to a DOS shell from the bootable floppy or CD with the USB drive plugged in.
-Run fdisk.
-Set the primary partition on the USB drive to active by using "set active partition" (option 2) in fdisk. If you don't already have a primary partition on the USB drive, use fdisk to create one.
-Exit fdisk.
-Reboot the computer to a DOS shell from the bootable floppy or CD with the USB drive plugged in.
-If you want, use the DOS command dir c: to verify the contents of the primary partition on the USB drive.
-Format and copy the boot files to the primary partition using the DOS format /s c: command.
-Run fdisk /mbr to write the master boot record to the USB drive without altering the partition table.
-Restart the computer, this time booting from the USB drive. If everything went well, you should see the C:> command prompt.
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