As Reghakr said, and I agree 100%, a Clean Install is definitely the way to go..
In answer to your question regarding the disc you have.. Did you purchase an Upgrade copy of Windows 7 or the Full version? If you purchased an Upgrade version then you can still do a clean install with it. It's just a bit more time consuming this way because you actually end up installing twice..
If you have the Full version disc then it's just a matter of choosing "Custom Install" from the installation options when you boot off the Win 7 disc then formatting the partition you wish to install to and your good to go from there..
If it is an Upgrade disc that you have and you still want to go the Clean Install route (which I would strongly...