On startup, tap the delete key. When the blue BIOS screen comes up, look for the 1st boot device setting. Change that to the DVD drive. Inser the windows 7 disc. Save and exit the BIOS. On restart you should see a prompt to 'press any key.' Do so when you see the message. It will then start the format/install process.
Check out the slideshow/guide for doing a custom install here:http://www.pcmag.com/slideshow/0,1206,l=245355&a=245352,00.asp
When windows finishes installing, your old user files will be located in c:\windows.old.