With Windows 7, Microsoft supported the creation of bootable windows 7 USB drives using a windows 7 USB/DVD download tool which allows you to create bootable usb drive using the windows 7 ISO image.
But since then many people are facing problems with the creation of bootable usb drive especially if you using custom created iso image.
Users are getting the below error for which we have a solution
Invalid ISO File
The selected file is not a valid ISO file. Please select a valid ISO file and try again.
The solution is tick the UDF option into the properties of ISO file. The property is usually accessible by any good iso reading software like poweriso or ultraiso.
You just have to open the ISO in that software, goto properties using the file menu and check or tick the UDF option. As shown in the below screenshot.
In this image I m using ULTRAISO.
Once you have tick the UDF option you can save the ISO image and browse it to windows 7 USB/DVD download tool, which now should be able to read it.