Steps on how to convert bootable dvd to USB

I want to reformat my PC. I have Windows XP running on my Acer laptop. My friend has a bootable DVD of a Windows 7 operating system. I think I can save money if I can just use his copy of the Operating System, but for some reason, my friend doesn’t want me to bring the DVD outside the vicinity of his office, SO the only solution here is to convert bootable dvd to usb. I already bought a 4 GB USB but I don’t know the steps on how to convert DVD into the USB. How can I extract the files from DVD and copy it to my USB?
