How to install an OS through a network connection?

I have searched the net and these forums but the google searches give tons of confusing opinions and searching here gives too many results that are not exactly what I'm looking for.

I have a desktop with XP and a laptop (has win 7) with another partition I want to install a new OS on. I have no USB drive large enough for the OS and the internal DVD is acting up. The OS I want to install is PC-BSD - it comes as a .img or an ISO version. The desktop and the laptop is already connected through the router/network for file sharing and my laptops bios does have the option to boot from a network.

I have read about using a PXE server to boot into an OS from the machine with the server but I dont want to do that..I want the desktop to send the img or iso to the laptop and have the laptop treat the file as if its a normal install of an os from a dvd drive. I want it to boot into the installer for the OS.

How would I do this?

I have another possible solution - i have an external hard drive connected via USB. Just like setting up an image on a flash drive for installation, is there a way to set up an image (.img with the os) onto this external hard drive? My PC supports booting from this device too.