Apple - How to create a Windows 7 installation USB from OS X?
Turns out OS X Lion ships with Boot Camp 4.0, the coolest feature of which appears to be the ability to create install USBs.
I hope I am not offending you, but this issue may have something to do with your level of understanding of what that terminal command actually does.
You can't just copy and paste the command :
dd if=/path/to/Win7.iso of=/dev/disk1 bs=8192
.. and expect that to work.
You need to change the above command to point to the actual location of your "Win7.iso" file (if that is what it's named).
eg.
Say I have a file called "windo7.iso" and it's currently located on my desktop, then the command that you should be using is :
dd if=~/Desktop/windo7.iso of=/dev/disk1 bs=8192
Hope this helps.