XP upgrade to W7 No new devices could be found. Error

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W7 No new devices could be found error during install

I am trying to install windows 7 onto an Optiplex 760 with AHCI SATA operation. I am trying to use an external hard drive (it can boot ISO files using a grub loader) with the installation information on it. After I select to install windows 7, It then prompts me for some drivers which I thought were the SATA drivers needed to see the Hard Disk. I found drivers on the dell website that look like they are for the Windows 7 install (Intel Matrix Storage Manager (OS Pre-Install Driver Only) Driver, R235890).

It doesn't seem to be what windows is looking for so it just says "
No new devices could be found. Make sure the driver files are correct and located on the driver installation media" and puts me back to the driver screen after a loading period.

The driver I think is correct, and I can even see my internal HD on the list when I hit browse. Why is it not happy? Isn't the purpose of that message to install mass storage drivers or something like that?

As a side note, if I burn the ISO to a DVD and do the install that way the problem is avoided. I just want to know why it's not happy when I load the ISO file with an external HD.

Thanks!
 
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Nibiru2012

Quick Scotty, beam me up!
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Because Window 7 is VERY finicky when it comes to installation.

A lot of users have to disconnect all their internal hard drives except for the one they're installing the OS to.

Instead of getting frustrated, just burn the ISO image to a DVD at no faster than 8X speed, then proceed with your install.
 

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