Here are the general steps to install Windows 7 "Lite" from a USB drive:

Use a tool like Double Driver on your current system before wiping it.

512 MB (minimum), though 1 GB is recommended for smoother use.

While the small size is appealing, using a 700MB Lite Edition carries significant risks, and it is generally for modern use.

The Windows 7 Ultimate Lite Edition 700 MB Only ISO is a technical curiosity — a testament to how much can be stripped from a modern OS. For a tinkerer in an isolated VM, it’s an interesting artifact. For everyday use, especially with sensitive data, it’s a ticking time bomb.