The windows 7 family pack is a great deal. $135 is a typical price, and can be found on amazon also:
http://www.amazon.com/Microsoft-Windows-Premium-Upgrade-Family/dp/B002MV2MG0
You get an activation code that is good for three pc's, along with a 32 and a 64 bit dvd.
The instructions have two variants.
If you want to upgrade in place, it can only be done from vista, and only to the same 32 or 64 bit variant.
Otherwise a clean install is needed. There is no problem there, and they are ok even if no windows is currently installed on the pc.
As to the e-bay vendor, I think it is legit, but you may be more comfortable ordering through amazon.