In order to do a really efficient install you'll need to do a clean or "custom" install as Windows 7 calls it.
Transfer all the files, folders, docs, audio, video, photos, etc. that you want to keep to the external hard drive and then do the new install.
Set your DVD drive in your computer to be the "First Boot Device" in your system BIOS and save that setting. Put the Windows 7 install DVD in the drive and again restart your computer and you'll see the following prompt: "Press any key to boot from CD/DVD drive". Do that within 4-5 seconds and the install will begin.
Be sure to first download all the latest Windows 7 drivers for your motherboard, sound card, LAN or wireless adapter, video card, etc., and save them to the external drive or a thumb drive if you have one.
If you're installing the 64-bit version of Windows 7 be sure your hardware is 64-bit capable first.
You may use the MS Easy Transfer wizard if you want, I don't like it and it's not that great in my opinion.
Let us know how it goes and keep us posted on your progress.
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Almost forgot my manners.
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