Doing the Daemon Tools is a little complicated for most folks. Download the Windows 7 USB/DVD Download Tool.
You can get it at this link:
http://www.microsoftstore.com/store/...usbdvd_dwnTool
Follow the instruction on that page and make sure you have a 4GB Flash Thumb drive handy. I see you have a 16 GB Flash drive so you're good to go on that part.
Your install should work and it will be a fast install too! The ISO image file you have will be used to create a bootable USB Flash drive install method.
Trust me, I have done it and it works very well. The only thing to remember is after the first reboot during install is to go into the BIOS and de-select the USB Drive as the First Boot Device or it will go into a constant reinstall loop.