Negative on the first question. No, I did it in XP.
My thumb drive works to install Windows7, and will also install Windows XP from it.
Look for a thumb drive boot program called "Komku-SP-usb" and work with it from within the command prompt. I loaded my SATA drivers on the thumb drive together with XP pro SP3 without a CDROM or floppy disk, and commenced to doing the installation. Komku is fantastic!