Read my post that I linked. An ISO is just basically a file that you write to your CD-R or DVD -r so the files can be read on the disc, it's an image of a disc (in this case windows 7).
You will have to do this on another computer as you require an internet connection as well as blank DVDs. There's also the option of using a USB key.
1) Go to my post
2) Download the Windows 7 ISO
3) Use the computer you download the windows 7 ISO to burn the ISO to DVD. You will need something like ROXIO or NERO BURNING ROM to do so. In Roxio for example, to burn an ISO - you will have to use the "Burn Disc image to disc".
4) Reboot your computer with the DVD in the drive. It should come up with install options.
5) Make sure you select your correct OS, you probably have windows 7 Home premium - select that.
Please note by doing this - you will probably wipe out all information on the laptop.
If you don't want to lose the information - you will have to take out the laptops hard drive and slave it to another computer to pull all the information out.