I put the win 7 disc in while I was running XP and it auto ran I chose the install and it told me that I could not upgrade from XP and that I would loose all my data, I clicked OK and it formatted and installed.
1 you could wipe the drive totally using click here
NOTE make sure you back up any data you need to keep
2 run win 7 install when the option to upgrade or clean install comes up go for clean install and it should create a back up folder of your data called windows old which should be a backup of your data files but dont leave it to chance.
again Make sure you back up any data you need to keep