Suggest you forget Vista now and boot from Windows 7 installer select Custom>Advanced tools and delete all, create one New partition, format and install.
If it rejects your product key, install anyway to see if it will complete. If it does, use this workaround to activate without prior OS on HDD: http://www.winsupersite.com/win7/cle...rade_media.asp
The other way to do the workaround is to install again as an Upgrade over itself, then it will take the key.
If this fails, then you have other issues which more advanced guys can help you with.