Copied from this link: Clean-install Windows 7 from the upgrade disc
.........If you have a version of Windows running on your PC, start Windows, insert the Windows 7 upgrade DVD, and follow the on-screen instructions. (All of the usual caveats about first backing up your data apply, of course.) If you wish, you can reformat your hard drive at the beginning of the installation process. This wipes out all the old data stored on the drive..............
You can also reformat, reinstall Vista if you have the Vista disks. Windows will ask if you want to reformat at the time of install.
Just follow the instructions from the disks.
After new installation you will need to update windows and reinstall programs.