So a guy sold you a PC with a hard drive that was password protected that he knew he didn't remember the password to? What a douche....
If you're feeling lucky, you could try a password cracker (download onto a flash drive preferably), however just remember this is the seedy underbelly of the internet - it's a tool that hackers use so it's tougher to trace the origin of these tools, which means a potential minefield of malware, viruses, etc. that may harm your computer.
Your best bet might be these steps: http://www.geckoandfly.com/4093/unlock-and-recover-hard-drive-password-hard-disk-password-removal-tool/
I've used Hiren's boot CD myself and it's good for getting yourself out of a jam like this.
Assuming you have access to the Administrator account, you could login as the Administrator and there's likely an option from there to remove it....unless he password protected that too, in which case you're SOL for that.....
Ultimately it may be better just to delete the partition and install a fresh copy of Windows on your hard drive - that's what I'd do - unless you have another hard drive with Windows 7 lying around you can just swap into the system.
I always buy my PCs brand new to avoid situations like this myself but ultimately any data on the hard drive is of no use to you if it comes from the previous owner so the best option might be to just blow it up and start over right off the bat.