setting up a computer with a recovery partition

I read somewhere a while back that it's possible to set up a hard drive to install windows very quickly on the first startup by extracting all the files from the install DVD using poweriso or something similar. Can anyone confirm this? If true, is it possible to set up a computer to do this on demand by extracting the files to a relatively small partition in order to reinstall windows without having the DVD, and how would I go about doing this? I want to give my older computer to my brother.. but he's extremely prone to messing computers up and I'm getting tired of reinstalling windows for him.

Excellent.. this is exactly what I was looking for. Thank you.
I'm going to see if I can get it to work and I'll be back with the results

HD recovery Partition.
Recovery Partition - Create