CD/DVD driver is missing. I cannot proceed with the installation

Ok here is the scoop:
I currently have a laptop running Win 7 x64 and I also have a desktop. This desktop, has a blank HDD. This desktop also has no optical CD/DVD drive installed currently. This means then that I must use a pendrive formatted to FAT (NOT FAT32 or NTSC) because this build is quite old but still has good hardware. I downloaded the official x64 Win7 Ultimate .iso file from microsoft. I now have two problems:

1)Windows 7 USB DVD Download Tool says that the OFFICIAL .iso file is invalid and wont let me create a bootable usb stick. This I resolved by doing it manually using the program PowerISO to extract the files to the FAT formatted usb drive

2)It works... well sort of, I get to the "Install Now" screen and click that. Setup begins. The first screen i am faced with says that it is missing CD/DVD drivers with the error message "A required CD/DVD drive device driver is missing. If you have a driver floppy disk, CD, DVD, or USB flash drive, please insert it now. ". My question is WHAT DRIVERS?!, there is no CD/DVD drive and the setup wont let me past until I pick one.

For #2 I've read a couple threads and they said to switch from SATA to AHCI. Unfortunately i am unable to do this because my BIOS is Phoenic -AwardBIOS. Can somebody please tell me what i need to do because I am completely stumped.

EDIT: FYI the HDD is very old but still in working order

The BIOS you are referring to probably does not look like you first envisioned it. I have no idea what version it is but it looks pretty much exactly like the one shown in this picture (http://h10025.www1.hp.com/ewfrf-JAVA/Doc/images/269/c01...). I cannot see any potions relating to NATIVE SATA DISABLED in there. Also the HDD I am using is a WD400EB, a very old one.

I have also tried the following
- New copy of the iso
-WintoUsb and Windows DVE/USB downloader tool also manual methods
-Trying a new HDD of the same type
-Using a new flash memory stick
-Turning off and on again
-Completly removing the HDD
-Actually trying to find drivers

Here is a picture of the error message (http://1.bp.blogspot.com/-ugefOgcZ1ZQ/TwkaBb2SYUI/AAAAA...)

And more pics of the BIOS taken with a potato (Other BIOS pics - Imgur)
I haven't got a hardware list as this computer is just too old for me to remember

Been there done that, no luck...

The error is almost always a bad installer.

Write the confirmed ISO to stick using UltraISO Software To Create Bootable USB Flash Drive

If problems persist wipe the HD first with Diskpart Clean Command

Did you look at the bios pictures? How do I change to IDE on that thing? And when I used poweriso it does the same thing as ultra iso

UltraISO always works to write flash stick, PowerISO rarely does. We have tens of thousands of installs here to go by.

I'd also reset the BIOS to defaults. Enable SMART so you'll be warned of HD issues.

At first installer screen, press Shift + f10 to open a Command Line, then run Diskpart Clean Command

Well I tried the diskpart wipe aaaaaannnnnnddddd....

Code:

BSOD
Stop: 0x00000124

Wheuuuu go BSOD. I guess I will try using UltraISO and report back my results

I reset to default, disabled SATA options as it is a PATA drive, then I changed boot order to the usb and enabled SMART HDD