Microsoft is considering offering Windows 7 on a thumb drive to allow Notebook owners to more easily upgrade their machines, still there is no official announcement is made by MSFT, but I think it makes perfect sense for Microsoft to take this route.

In this way, it is very well possible that Microsoft will offer some versions of Windows 7 in the form of a pre-loaded USB flash drive. This way, existing owners of devices like the Eee PC and Dell Mini can do the OS upgrade without having to attach an external optical drive.