Window 7 recovery not working

I am getting

"Disk error
Press any key to restart"

in my attempt to restore from USB. I am able to access bios setting where I have enabled the USB option for booting. I followed instructions to create the recovery usb for widows 7 32 bit using the easyBCD app.

The usb directory has the following files & directory.

NST - directory

What could be going wrong here?
I reformatted as fat(default) under vista recreated the image and getting the following error message-
"Bootmrg is missing
Press any key to restart"
ah yes - me too. (see post from last week, now showing same error after reformatting in Vista) is there something wrong with the instructions? or EasyBCD?
No. Instructions have been tested as posted with the latest version of EasyBCD.

Make sure to format as NTFS.