Yes it is. A couple of points
1) IDE supports two devices on a cable, one configured as Primary and one as Secondary (this used to be Master and Slave, but a court in California ruled that this language was not permissible). When you remove the IDE HDD, you have to make sure that the optical drive is set to Primary; this is usually done with a jumper and less often determined by the actual position on the cable.
2) The Win7 drive has to be a full version. If it's the manufacturer's recovery disk it may not work.
You have already hit one one of the most important things: When you install to the SATA drive, the IDE drive must be disconnected. I would recommend setting the SATA controller to AHCI mode instead of the default IDE mode before doing the install; it will make your life easier when you upgrade to an SSD.
Thanks, this answers everything. However, is it possible that an IDE optical drive and IDE hdd would run if the op drive was using the master IDE connection? I know this question is irrelevant to the topic but I'm psure that my old hdd was the slave connection when I used it..