When I follow the CD instructions from ubuntu win7 gives "selected disk image isn't valid" and pendrive installer doesn't see the .iso file. I can see it with windows explorer. Any ideas?
It's possible that you got a bad/corrupted download.
Download the gnu md5sum utility for windows and check the disk's sum against the sum it should be...
We need to find out if it's actually a bad image before we can fix the problem