The version of XP that I linked to is a full OEM version. It will install on a new build without any other prerequisites. The reference to "update" in the description is to the fact that it is updated to include SP3. As far as I am aware Microsoft do not produce OEM udgrade versions.
As for the Windows 7 (which is a far better OS), why not return the version that you have (it sounds as if you might bought an upgrade version, not the full version) and exchange it for a full version; any reputable retailer should do this for you. It will, obviously cost you more. But are you quite sure that you have only an upgrade version? It should state this quite clearly on the packing.
"Full version" means a DVD that can install the Operating System on a computer with no previous software being present. An "upgrade" version is cheaper and requires a previous installation to be present (or you to have access to a CD with a previous version).
What exactly happens when you try to install? It may be that your problem is not to do with the version of Windows 7 that you have.