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Sorry about sharing (my?) Microsoft files...
With the windows 7 wim, I can reach the screen to select wich version I want to install (it´s an all in one), but after that I get an error saying "Windows could not display the images available for installation". Here is was the wim of windows server I am using PS. I am mixing your method with the one in here so I can get several installations in the usb drive and not in the first partition, so I have a normal usb stick but if you boot from it you get the magic, so far Windows 7 (All in one) and Windows Vista (All in one) are working, the only one I cannot get to work is the server.
Nice job, works like a charm in windows 7 and windows vista . Anyhow I'm having problems to do it with Windows server 2k8, posting a problem that is not able to find dummy.sys (and I triple-check that the file is in \system32\drivers. You know what could be the problem? maybe the registry key...