For data that might have been on your current hard drive, it's certainly very common to add a second brand new hard drive to install Windows 7 onto, while leaving your current hard drive also installed.
That way you can easily just access the data on the old drive which will get probably a drive letter of D as seen by Windows 7 (which will install itself onto what it sees as C, on the new hard drive). Or, if you want, you can migrate that data off of the old drive and onto the new C partition (Windows 7) or even onto another partition(s) you create on the new drive. Or, just leave it on the old drive, but you might want to place it into more appropriately named folders if it's in a place now that seems inappropriate for the future.
If you want to end up with a dual-boot system (with both Vista and Windows 7 available from a boot manager menu), that's one installation method for Windows 7. If you want to end up with just a single Windows 7 system (with the data from the old drive just available as data), that's another installation method.
But assuming you just want to move to Windows 7 and forget about Vista, you should change your BIOS setting before you run the Windows 7 install, to set your new hard drive as "hard disk #1". This will cause the Windows 7 installer to create both the (a) 100MB "system reserved" partition, which will be marked as "active" on that drive, as well as (b) the Windows 7 system partition itself, on that new drive.
The existing Vista system on your old drive should be ignored by the Windows 7 installer, because you've made the new drive "hard disk #1" in the BIOS. You're not doing an "upgrade", you're doing a clean from-scratch new install to an empty new drive. It shouldn't be necessary to disconnect the old drive first, once you change "hard disk #1" in the BIOS to point to the new drive. Both drives can be present during the Windows 7 install. But if you are cautious, skeptical, or dubious, you can of course disconnect your old drive during the Windows 7 install and reconnect it after you're up and running on Windows 7. My own feeling is that it should not be necessary to do this.
You can set the partition size for the Windows 7 partition during the install, leaving the remainder of the new drive for yet another new data partition and drive letter. This will be in addition to the old hard drive, which if it's currently only one partition will simply be yet another drive letter in your new Windows 7 environment.
Once you get Windows 7 up and running from the new drive, you'll probably want to clean house on that old drive, deleting the Vista-specific folder and files, while leaving your data. Personally, I'd recommend moving the data from the \Users folders (e.g. Documents, pictures, etc.) to ordinary external folders on that drive, or into comparable \Users folders (on the new Windows 7 C) of Windows 7. Up to you.
But for sure, you'll have no more need for the Vista contents on the old drive. You should just be careful you're not deleting your real data (which might be buried inside of some \Windows folders/sub-folder on that old drive) when you clean house.