Simple, if you don't have a disc then you'll have to do a little more.
But I like to unhook all HDD and SSD that will not be used just to prevent installation on a different Disk by mistake.
Then insert the Disc and follow the steps.
But if you only have a key, you have to go to Microsoft's site and download the installer. Launch it, follow the steps-I believe it asks for your key. It will go onto your USB flash drive and you install with it-I believe 8GB is what is required, but I haven't done it via USB-so I can't tell you exactly.
You just keep your USB connected, go into your BIOS and launch via USB drive-(Set the boot order) depends on motherboard.
Do note that you can't unplug the Win7 HDD if upgrading, because it needs it to...