YUMI (Your Universal Multiboot Installer) can be used to create a multiboot USB stick.
It can be used to create a Multiboot USB Flash Drive containing multiple operating systems, antivirus utilities, disc cloning, diagnostic tools, and more. Contrary to MultiBootISO's which used grub to boot ISO files directly from USB, YUMI uses syslinux to boot extracted distributions stored on the USB device, and reverts to using grub to Boot Multiple ISO files from USB, if necessary.
I haven't used it but the PenDriveLinux is a very useful site and resources there are highly reccomended.
Note: With all the Live USB creator tools I have never had any luck making a bootable Windows 7 USB apart from using the Windows Live DVD/USB Download tool.
In regards to installing an OS from an .iso stored on a different partition on the same disk you want to install to I think you may have problems, if you can find a way to attempt it.