Sorry, I will try to explain better.
Is the "recovery disk" an actual full operating system, just a recovery disk, or does it say: "Reinstallation DVD....This software is already installed on your computer. Use this DVD only to reinstall the operating system...." ?
As long as it isn't a recovery-only disk, yes, you could install it (Vista) on the new hard drive, then do an upgrade to 7. However, there is another caveat here: you only had one product key for the upgrade disk (which you said you used), meaning you can't do it again (upgrade) without purchasing a new upgrade product key. So even if you bought the $129 Vista (or just used your current disk, provided it has the full os on it), you wouldn't be able to use your upgrade disk again without buying another product key for it, as well.
Did that make sense?
Here is the first route you could take:
Use your current Vista disk, and try to install it on the new hard drive. Then, go purchase another UPGRADE key to upgrade from Vista to Windows 7 (I would suggest you use the upgrade media to do a clean install, which I gave a link to in my last post). All that matters is the product key, anyway. That should work. If you get any activation errors, just do the activation by phone (takes about 6 minutes), and everything should be fine.
If that doesn't work for some reason, the simplest thing to do would be to just buy a full retail copy of Windows 7 and install it. That is the easiest, but most expensive route to take. So, if you want to save yourself some time and effort, just go buy a full retail copy. But if you feel adventurous, try the install>upgrade procedure.
If I didn't make sense again, point out exactly what you didn't understand and what you don't understand about it, and I will explain that part further.