First of all, do you have a second partition on your main Hard Drive called D: or a second Hard Drive installed into your machine's case?
Well, in my case, 2 years ago, when I bought the machine that I currently use, came with a quite large Hard Drive with the MS Win. Vista(6) already pre-installed. The drive was already pre-formatted for two(2) partitions C: and D:. C: one for the main installation and setup of the O.S. Folder(Dir.)and, D: as the Data storage use only. So, by default, Vista makes that partition as the only source for back-up of its previous image of its own installation status. By default, also, you will need the Windows program of Clean Disk in order to set up How and When you want to clean up(erase) the older, not needed any more, system restore points(previous dates of stable use of that particular O.S.).
If you do not have a second partition, go get yourself a much smaller Hard Drive at the nearest electronics store. Do not attempt to re-format the only system drive you have, in order to affix a second partition for it. I take for granted here that you do have an official DVD disk of Win. 7. Once you have installed in your new D: Hard Drive, insert your DVD disk of your upgrade O.S. in that DVD drive of yours and, do a repair installation procedure when the installation window appears. Through the installation procedure, select yes for using the second available Hard Drive as the new Data Only Drive for use as the first restore point will be created. Since, while the repair of the installation, it might go, right away, via the internet connection, see if there are updates/upgrades to download and install as of now. Let it reboot after all updates/upgrades are now, fully, installed(click the yes button in the reboot request window, as it appears/pops up). Do not touch anything when it does just that. It will show a message before the sign in with your password shows up. Configuring Windows from 0% and making its way up to 100% for the first stage of doing so until all stages are done.
As a further re-stabilizing application of Windows 7, please, get a Tune-Up progam such as Iolo's System Mechanic Pro 9 for further fix any other hardware, software and, the machine's registry itself errors it might have. That's for Optimizing the well being of the machine's inner functions in its overall whole.
There. Enjoy shopping, re-installing and, re-configuring your machine's O.S! 