Windows 7 Issues with Windows 7 Clean Install

So, I'm probably going to sound like a completel noob here, but whatever. I just did a custom install of Windows 7 (64-bit) on my laptop using my upgrade version. Everything went fine, for the most part, but apparently I didn't format my partition properly. I assumed that with a custom install, all of my files would be wiped, so I backed them all up. Now it appears that they all still exist and are accessible under the Windows.old folder. I don't really want that there though, as it just seems to complicate things. Can I delete the Windows.old folder and restore everything from scratch? What would the ramifications be if I did that? Should I just do another custom install again and format the partition correctly this time? How would I go about doing that?