If the message same up before Mini XP, it wounds like you may have network listed close to the top in your boot order sequence so system is going to try that (and it will fail) then your system will try the next thing in the boot order which might be your
CD/DVD drive, etc.
If you don't like the message, in the BIOS move the network boot option further down in the list. I don''t know why you can't press F2 to get into the BIOS - that is what your user manual says to do.
Rufus will do a quick format of your USB drive and that will wipe out any data on the drive (that is what a format does). Then you can use the drive again for other things - the drive itself is not destroyed, just the data on it since Rufus is going to
format the USB thumb drive for you.
I have never needed to look at the Rufus log since it works every time for me and everybody else but mine looks a lot different (better) than yours.
You start getting errors after Extracting files and I don't know what that means. Are you just using the Rufus defaults?
Maybe the problem is with your Windows 7 machine (just a thought) or maybe your thumb drive. I have never seen anybody have all these problems :-)
Mine looks like this:
Copying ISO files...
Extracting files...
libcdio: Found Extension: Joliet Level 3
Disc image is an ISO9660 image
This image will be extracted using Joliet extensions (if present)
Extracting: F:\HBCD\Boot\Keyboard.bat (1.1 KB)
Extracting: F:\HBCD\Boot\SeagatDW (1.1 MB)
(...lots more until it is finished...)