I haven't installed Win 7 yet, but when i installed Win 7 RC, (a beta version), from a DVD I came across a similar problem.
I inserted the DVD and restarted the system, went through the install process until it came to the "Restart" message. I should have removed the disk then before allowing the system to restart, but didn't. When it restarted with the disk still in, it started the install process again, and I ended up with a Windows folder and a Windows.old folder.
No harm done for me, but I was annoyed with myself.
So, before it restarts, remove the disk.
Mark
When is it safe to remove the Windows 7 setup DVD during/after installation. I want to know this because during 'Completing Installation' screen the led that indicates DVD usage is always on. Also after the system restarts for the last time when it prepares the system for first use and checks video performance the DVD usage led is always on.

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