If you don't want to buy Windows 7 to activate it then I'd reinstall Vista using Vista ISO download
and following these same steps for Clean Reinstall - Factory OEM Windows 7.
If you want to buy Windows 7 then boot the DVD to reinstall to C. If it fails let us know at which step in Clean Install Windows 7
and the exact error message in full.
You can also see if the Recovery partition will reinstall Vista by tapping the key given on first boot screen for Factory Recovery, usually F10.