1. Turn on the computer running your current edition of Windows, and then insert the installation disc into the computer's CD or DVD drive
--- You can NOT install a dual-boot system from the C:\ drive? I have a netbook, and thus I do not have a CD or DVD drive. So I tho, maybe I could download Windows 7 on C:\ drive and install it on D:\....
Hm, wouldnt it be possible to "mount" the .ISO file (which you download) by creating a virtual drive? You could use an program like Deamon tools
for this. Deamon Tools creates an virtual drive, and lets you "mount" the .ISO file into the drive you've created. Once you done that, I think you should be able to install Windows 7 from the drive you just created. This would save you a empty DVD and would be an solution.
Please note: I have not done this, I just thought this might be the solution.
Let us know if you succeeded.