boot/bootsect is not a valid Win32 application


this error comes up when i try and boot from USB flash drive. the installation files are on the drive but on reboot it says 'NTLDR is missing. I am using a 32bit XP OS to configure the boot i think this is why it says boot/bootsect is not a valid Win 32 application when i try to comfigure it in CMD. is there any alternative to this??
I nuked my C:, put XP on D: and im trying to install Windows 7 from a USB flash, i put the installaton files on the USB stick and configured the BIOS to allow USB Flash in the boot sequence order and when i reboot from USB flash it says NTLDR is missing.
Jeez.... I totally forgot about that feature!!! :|

So many new things added in EasyBCD 2.0 so quickly, hard to keep track of what I coded!