It's much easier to do it with UltraISO.
You load the install DVD or an iso of the install DVD you may have downloaded into UltraISO. Then simply use the 'Bootable' menu option to 'Write Disk image...' and having set which drive your USB Key is, press 'Write'.
You can also check the box to 'Verify' your write.
You are effectively doing what you do when you burn an ISO to a DVD but in this case it's a one step operation to 'burn' a bootable USB key without having to format it, use the HP or MBR tool or Diskpart etc. You can overwrite a used key or do this on any new key.
And you can do it in XP, Vista or Win 7.