Formatting your disk doesn't destroy it. It's merely a matter of rewriting. Of course, it wears your disk, but moderns disks can take a lot. I wouldn't be concerned about that, we still have disks from 1980's working properly.
But usually it's better to make a clean install than an upgrade. Since you don't seem to be sure of what you have, I would suggest you start on a fresh base; safe copy what you have, and use the Windows 7 installation disc whs mentions.