At this point, Windows 7 doesn't need to be "installed with caution". Run the Upgrade Advisor to find out if any of your software has issues with it, and then ditch the dated, old school dual boot ideas. Assuming your netbook has the hardware to run it, Windows 7 will be a better fit than XP anyway.
As for the install, I haven't come across too many people who still do the installs from DVD anyway. It is much easier and faster from the USB drive, and if you use one large enough, you can have your drivers
on the same disk, ready to go as well.