If you purchased a copy of Windows 7 on DVD at a retailer or online store (or "e-tailer," as I like to call them), you can install 7 using Microsoft's simpler new Interactive Setup Wizard, which guides you through a series of steps required to get Windows 7 up and running. There are three primary ways to install Windows 7 using Interactive Setup: a clean install, where Windows 7 will be the only operating system on the PC; an upgrade, where you upgrade an existing operating system to Windows 7, replacing the old with the new; and a dual-boot, where you install Windows 7 alongside your old operating system and use a boot menu to choose between them each time you reboot.
A clean install of the operating system is the preferred method for installing Windows 7. Although it's possible to upgrade to Windows 7 from Windows Vista, this path is perilous and can often result in a Frankenstein-like system in which only some of your applications work properly. In my experience, it's best to start with a clean slate when moving to a new operating system, especially a major release like Windows 7.
This screenshot gallery walks you through the entire Windows 7 setup process, using Microsoft's Interactive Setup Wizard. This application was completely overhauled for Windows Vista and then further streamlined for Windows 7, and it's now much simpler, and faster-moving, especially when compared to the version used in Windows XP.
--Excerpted from Windows 7 Secrets by Paul Thurrott and Rafael Rivera