The most common and preferred method of installing Windows 7 seems to be the DVD version, but there are ways to boot from a USB device also. But now you can boot and install Windows 7 from a Windows Phone (Windows Mobile). Microsoft’s James O’Neill has a simple tutorial on how to boot and install Windows 7 from a Windows phone and he has used HTC Touch Pro 2, running Windows Mobile 6.5.
Now the advantage of using Windows Phone to install Windows 7 is that you do not have to carry the additional USB memory device since you would be carrying your phone anyways.
You need a pretty good size memory card on your Windows phone, preferably 16GB so that you can carry other stuffs as well on the memory card.
More details here.
I have the same phone, but didnt understand the part where he used diskpart. Why did he bother to use it ? The storage card would already be in Fat32 format.
So just copy the windows DVD files over to the storage card and boot ? thats all ?