Is it possible to do a fresh install? I only have a hard drive and windows 7 ISO file.
Assuming you have a host PC running Windows 7 or Vista you can make the USB key bootable using DISKPART. I wrote up some fairly detailed instructions on my website to install Windows 7 on an Acer Revo.
If your PC is post 2000, you can boot from a USB flash drive (you may have to set boot order in the BIOS).
Yes you can. I did the same thing a couple of weeks back. You don't need any flash drives or any other and is just sufficient with what you have(iso file & hard drive). Just extract the 'iso' file into a folder and run the 'setup' file. After running, you'll get a few windows asking on which drive to install, which would look familiar if you had installed any OS earlier. Assuming that you have installed your your current OS in C:\ , select the same. It may restart couple of times during the process. Done! Finally the earlier version of your OS will be in 'C:\Old Files', which you can 'shift delete' it. And post installation, you can use the same Windows Vista Drivers for Windows 7.