So, first step is to get en_windows_embedded_standard_7_sp1_toolkit_x86_dvd_651894.iso ( or whatever is newer .. )
You can get a trial from Windows Embedded Standard 7 HomePage.

After that, you want to follow this Building a Windows Embedded Standard 7 Image DeveloperNetwork Page. What it basically sais is:
– you need to run tap.exe on your windows target machine to get information about the drivers it needs installed !
– get the mpq file it generated
– create your IBW directory ( I generated mine in c:\users\dexter\desktop\embedded7img )

After that, you probably want to do this

"c:\Program Files (x86)\Windows Embedded Standard 7\Tools\AMD64\oscdimg.exe" -n -m -b"C:\users\dexter\desktop\embdedded7img\boot\etfsboot.com" "c:\users\asandu\desktop\embedded7img" "c:\users\asandu\desktop\embedded7img.iso" 

Et voila, you have a windows embdeded 7 bootable iso image.

P.S.: You probably want “Windows Explorer Shell” if you want your familiar desktop instead of the “Command Prompt Shell with Custom Shell Support”