You can virtualize your existing Windows 7 installation, either using the method ntw1103 mentions or using VMWare's Converter, which will turn it into a VMDK file.
This is perfectly legal if you have Win7 Pro. Microsoft's license does not allow virtualization (last time I looked) of less-expensive licenses of their operating systems. (This is as of XP and Vista, I haven't read the Win7 licenses in detail.)
It's a wild thought and probably won't work for you, but you might consider trying ReactOS, which is a Windows-impersonating OS, an operating system using no Microsoft code but attempting to duplicate all its APIs and run all Windows programs. It's currently in alpha but it looks interesting, and I believe you can download a VM containing ReactOS directly.