Here is the solution to the problem. It worked for me.
This is copy pasted from the second post here :
http://social.answers.microsoft.com/Forums/en-US/w7install/thread/aedb1245-f8f9-42ec-9a0c-1aa932363bbb
Where this guy got the solution from is here :
http://www.sevenforums.com/general-discussion/30470-make-bootable-iso-student-d-l.html
* * SOLUTION * *
There is a way to create an image file dispite recieving this error we seem to be all recieving.
1. You will need to use an additional Microsoft command-line tool, called Oscdimg.
Details here
Download here
Download the
.zip file and extract it. Then cut and paste the Oscdimg.exe file into your C:\Windows\System32 directory
2. You now need to start up your command prompt, which can be done by Start->Run then enter 'cmd' into the prompt. (Run as administrator if in Vista!)
3. You should now have the command prompt open, now you need to use the Oscdimg tool to create the image, by entering the following:
Oscdimg.exe -u2 -bC:\ \expandedSetup\boot\etfsboot.com -h C:\ \expandedSetup C:\ \Win7.iso
For example: Oscdimg.exe -u2 -bC:\Users\James\Downloads\expandedSetup\boot\etfsboot.com -h C:\ Users\James\Downloads \expandedSetup C:\ Users\James\Downloads \Win7.iso
It will now scan the source tree then begin creating the image. PLEASE note: you must replace ' ' appropriatly as to where you have downloaded the files.
4. You should now have an image file, called Win7.iso, in the same directory.
5. You can now burn this
.iso file to a blank DVD using appropriate software. I personally use PowerISO (You dont need the paid version to burn the image)
6. Viola! You have your not so shiney Windows 7 disk. Restart your computer and install away!
- I take no acknowledgment for this, I dug about and found the info at:
http://www.sevenforums.com/general-discussion/30470-make-bootable-iso-student-d-l.html
Thanks SIW2
:)
* Edited byNixonInnes Thursday, October 22, 2009 8:54 AMtypo's
* Edited byNixonInnes Thursday, October 22, 2009 9:02 AM
* Marked As Answer byKevin HauMSFT, ModeratorThursday, October 22, 2009 6:35 PM
* Edited byKevin HauMSFT, ModeratorThursday, October 22, 2009 9:52 PMstep to run CMD as admin