Can't install windows 7 using rEFIt

So I bought the digital version of windows 7 (.ISO file). I decided to use a USB to install windows 7 via bootcamp on my macbook. So I used Microsoft's windows 7 USB DVD TOOL on my other laptop (vista) and put the .iso windows 7 file on the USB. I downloaded rEFIt and rebooted the macbook twice with my USB in it. The second time, for some reason when I get the rEFIt boot option, there are two windows options, one is "Boot windows from HD" and other is "Boot windows from Partition 1". Why am I getting these two options instead of one? If I choose any of the two options I get a message "No bootable device". I can't figure out what the problem is, I partitioned my hard drive using bootcamp (40GB), I put the .iso file on the usb and using rEFIt.