Hey cloud, I did the same thing as you in Dec '11 through my school (computer in the sig) and I downloaded my win 7 pro through the school MSDNAA site (legitimately).
Like scout said you should make it an .Iso file, do they have any other download options besides the .rar type? If not, don't worry you can still do it, you just have to "un-rar" it. I used a program calle "Free RAR Extract Frog" the other day for an unrelated .rar file and it works great. Here is a link to the program download:
http://download.cnet.com/Free-RAR-Extract-Frog/3000-2250_4-10804840.html
(NOTE: look carefully at that download when you install it because cnet, while it offers good software, tries to bunch in other crap like avg taskbar and stuff so just uncheck that when you go through the installation.)
So yeah "un-rar" it. I downloaded my copy (mine was a .iso though) to my external HDD and then burned that to a dvd because it was easier (imo) than setting up the flash drive to be bootable (although I did that the other day too).
(NOTE: if you burn the OS to a DVD, use the slowest write speed on there so that the disc is less likely to have errors on it.)
Also, the copy of windows 7 professional I downloaded first was "Windows 7 64 bit debugged checked". I thought, well I guess I want one without bugs. WRONG. Don't download that version, it is a software/programmer version and it runs poorly compared to the regular "windows 7 professional 64 bit" version for home use.
Yeah I know some of that wasn't really your question but I did it the hard way and it was a huge pain in my ass, I was hoping to help you avoid some of the mistakes that I made.
TL: DR - Unrar it using that program above. Turn it into an .iso file (I guess using the program scout suggested). Burn that to a dvd (or a bootable USB drive). Plug in, restart comp, access bios boot from DVD (or flash drive USB HDD) whichever medium you are using. Follow directions, profit.
If you want to use a USB instead of a DVD to install your OS, here is a good guide I used to make my bootable USB drive: http://arstechnica.com/business/2009/12/the-usb-flash-drive/
It has the Windows 7 USB DVD Download Tool program download link as well.