The Windows OS you have on the thumb drive...is it an OEM or something else? You could download and burn and ISO Windows 7 version specific and bit specific from here...
It could also be an issue with BIOS. Be sure to have the settings correct = thumb drive is bootable. Further, you need to have your system disk properly formatted. I had a heck of a fight when installing Windows 7 because it wouldn't recognize partitions > I had to jump to another partition program to get it work.
Supposedly, Windows formats a disk. Well yeah... supposedly. By experience, and there's not so very much of that in my case, I would recommend to format the system disk with gParted, GParted -- About and then push Windows in. And even in that case, with a formatted disk, you may have to have Windows re-format it.