Recently, while downloading and installing the latest bits of Windows 8 (RTM Evaluation Version), I had an issue creating a bootable USB drive for it, using the Windows 7 USB DVD Download Tool. I got an error when the tool attempted to format the drive.
I found another tool called WinUSB, which was quick to download and run. The steps are straight forward for creating a bootable USB device. Run the tool, select your USB device from the list, locate your source Win8 ISO file, and click on Make USB Bootable. You will loose any data on the drive, so make sure to backup whatever you have there.
Here’s a complete tutorial about the tool, so check it out. Happy WinRT coding !