My friend just bought new Acer Aspire One Netbook and it is preloaded with windows vista. The netbook is not really good enough for him because the screen is too small and he need to buy an external LCD display to watch the movie. Since the netbook does not come with the CDROM Drive so there is no way to install windows 7 using CD/DVDROM. So the solution is to have .iso file and mounted to your virtual drive using ultraiso (upgrade Method) or install windows 7 from usb using USB thumb drive.

The procedure
To start the installation you may need to have at least 4GB of USB pendrive. This is because the windows 7 installation files required approximate 3++Gb disk space. You can also use this method to install windows xp from usb.

Firstly download the latest version of WintoFlash 1.2MB size (This program will let you automatically copy your Windows version to USB Flash Drive and it support Windows 7)

Install WinToFlash and point the right location (Windows 7 CD/DVD) and set the destination (4GB FlashDrive)
Warning !! This software may contain bugs (spelling too). I am not responsible for any damage. I posted the screenshot of the WinToFlash.

After finish with the transfer. You just change your Bios setup and set it to boot from Flashdrive. The configuration is different . For Acer Aspire One once you restart/boot your pc you just need to hit the F12 button and choose boot from flash drive then it will automatically boot your windows 7 from usb.