In this day of age, it's very practical to have a Windows 7 installation on your USB key, for many netbooks and devices don't come with CD/DVD drives anymore.
Zip files are compressed archives containing documents, images, folders, basically any type of files on your computer. We create them to save space and make them more practical for sending via email or file sharing services.
Some installations or settings changes require you to restart your computer. In most cases you don't need to actually reboot it, you only need to restart the explorer.exe process.