You can install Windows OS's over networks in one of two ways:
For home/small organizations, you can use Windows AIK (Automatic Installation Kit), this not only lets you install an OS from a network location, it also lets you completely automate the procedure with an XML file called an answer file. It's not the easiest thing to get working and some command like knowledge and basic understanding of its function are necessary.
For large organizations, there is a Windows Server role called WDS (Windows Deployment Services) which brings Windows AIK into a server environment, you can store, sort and catalogue multiple OS images, driver packages and answer files in a neat GUI, this also used PXE so there is no need for any physical media (at all, not even the AIK CD), all the machine needs is a network connection that can reach the WDS server.