There is a problem with the bootinst.bat when using Windows 7. You have to run it as an administrator for it to work. But when you do this it doesn't detect the USB drive automatically.
Everything that is done by a .bat file can be done by hand using cmd.exe. This particular batch file is more of a UI than a script. Therefore it's easy to do by hand:

First of all you need to format the drive and extract BOOT and BT3 from the iso file and put those folders on the drive.
Now when you have done that, to the trick:

1. Run cmd.exe as an administrator
Press start. Search for "cmd.exe". When you find it, right click it and select "Run as administrator".

2. Make USB drive bootable
What the batch really does is executing a application. So we'll do it by hand:
Check what letter your USB drive had: (Eg. C, D, E etc.)
Then write in cmd: "E:" (Replace "E" with your letter)
Now it's time to execute the application with the correct settings:
"\boot\syslinux\syslinux.exe -ma -d \boot\syslinux E:" (!!!IMPORTANT!!! Again, replace "E" with you letter !!!IMPORTANT!!!)