If you're looking to integrate Windows 7's Service Pack into your disc, you'll want to scroll down to the beta releases. That service pack includes all the patches, security fixes, and other updates from its first year and a half of existence, so I'd recommend snagging the beta. Download the appropriate 32-bit or 64-bit dowload for your system (the system you're working on, not the Windows disc you intend to create), install RT7Lite, and launch it.
The beta release for RT7Lite that includes Windows 7 with SP1 is :
Download RT Se7en Lite - Beta (build 2.6.0) for windows 7, windows Vista x64 now!
UPDATE - still having issues with usb installation - resorting to:
xcopy c:\ d:\ /h/i/c/k/e/r/y