These steps will take you through preparing a USB ram drive (thumb drive, pen drive, or how ever you care to refer to it) so that you may use it to boot your Windows PE image without the need of a hard drive (or bootable CD/DVD). These steps assume you have already generated your Windows PE folder structure where you would typically burn it to an ISO image. For preparing your WinPE image, please see Working with Windows PE Images.

1) Run diskpart from command prompt running as administrator (right click the command prompt icon and choose "Run As Administrator")
2) Type the command: list disk to see the available disks and note the one that represents your USB thumb drive
3) Select the disk: select disk # where # is the disk you determined in the above step
4) Now that the proper disk is selected, prepare it with the clean command by typing clean
5) Now create a partition on the clean drive by typing: create partition primary
6) Select the new partition by typing: select partition 1
7) Set the partition as active by typing: active
8) Format the partition as FAT32 by typing: format fs=fat32
9) Assign the new partition by typing: assign
10) Type exit to quit diskpart

Now you are ready to copy the files. The location from which you want to copy the files is the folder created which would normally serve as the contents of your ISO file. For example: c:\images\winpe\iso

Typically this file will contain three folders and a file: directories: boot, EFI, and source. file: bootmgr. Simply copy these files to the prepared USB thumb drive root and you are ready to go!