There are two ways to install a new operating system on your computer. The first is to do just an upgrade, where it only changes your OS, but all of your programs and files and bookmarks, etc. remain the same. The other is to do a fresh install, which I believe you need a disk in order to do but I could be wrong. But what it does is wipe the harddrive and installs Windows 7 in place of the old OS rather than upgrading the old OS to it. This is what I did because I was getting rid of viruses and crap that I could not get rid of.
Once you start the process, just follow the directions that it gives you when you start the process. Good luck and welcome to the wonderful world of W7. Personally, I love it so much more than any of the other Windows operating systems!