Windows installation files are essential components used to set up the Windows operating system on a computer. These files contain the necessary data and instructions for installing, configuring, and running Windows. They can be found on physical media like DVDs or USB drives, or downloaded from the Microsoft website. During the installation process, these files are copied to the computer's hard drive, allowing the system to boot and operate. Users can create a bootable USB drive with Windows installation files to install or repair their operating system, ensuring their computer runs smoothly and efficiently.