I had a hard time trying to achieve the above. Every time I tried to copy create a usb recovery disk for windows 7 it did not work. I could write the files, but it would not boot, despite flagging the partition as bootable.
I found this post that solved the problem.
First, mount the recoverable CD you have or extract the ISO image by running the following command:
sudo mount -o loop recovery_cd.iso /tmp/windowsboot
Then format your USB drive as NTFS and mark the partition as bootable.
Copy the files to your USB.
cp -rvf /tmp/windowsboot/* /mnt/your-usb-folder
Download the latest stable version of ms-sys and install it.
tar xzvf ms-sys-2.2.1.tar.gz -C /tmp
cd /tmp/ms-sys-2.2.1
make
sudo make install
Once it is installed you can write the windows 7 MBR to your USB drive (root permissions required):
ms-sys -7 /dev/sdX
Thats it.