All new dvd drives are capable of installing programs playing music and movies as well as burning cd's and dvd's.
A dvd drive is a must for installing Windows 7 as the OS comes on a dvd. The one you have been looking at is a fairly popular choice.
Just to be sure that is a SATA drive does your motherboard support SATA if not you will need to get a PATA version of it or another make.
If you don't know you can download the free Belarc Adviser which will let you know. http://www.belarc.com/free_download.html