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Learn how to install Windows 7 Service Pack 1 (SP1)
Whenever you burn system discs, you should do it at the slowest possible speed. DO MAKE a physical disc, don't use your HDD or an iso. image!
Personally, I would do a repair install. Throw in your Windows DVD, and proceed. I guess it would be best to do from Windows running. In case you're one of those who didn't get a Windows disc when you bought your computer, I can tell you: you have a lawful right for a disc. It's International law, and you can demand it anytime, anywhere.