Just to make sure I do not misunderstand, you downloaded Windows 7 and the Windows 7 SP1? I will assume then you can download a full Windows 7 install with SP1 already included.
If you have the correct install software, which would be a DVD, you might want to try downloading it again and burning at a slow speed, like 4x.
If you are installing over Vista, (running the install from within Vista), it is normally recommended to do a clean install of Windows 7 to keep any older drivers from interfering with the install.