Windows 7 will happily chug along just fine with no internet connection. I would however connect it during setup to do activation, and allow Windows Update to fully until no more updates are shown. Having the latest updates might save you from possible application compatibility issues, bugs, etc. You can also most likely disable some Windows Services (do your research!) to do with Networking, and disable the onboard NIC as you won't be requiring it. This might save you a bit of resources, and make it perform just a tad better. You'll be able to disable Windows Update, BITS, etc. Whether you keep Antivirus on the machine is up to you (could still get a virus from removable media), but then you'd manually have to update the definitions.