Of course you can.
Insert the CD, boot from the CD (change the BIOS priority order if you need to), then reinstall windows on a formatted hard disk.
When you click Next and Next etc. it will detect your hard drive. If you have enough space you can install Windows ontop of Windows 7 and it will create WINDOWS.OLD. This is your Windows 7 files saved for use in Windows 8 if needs be.
You can delete this folder after installing Windows 8 by using Disk Cleanup and clicking System Files (shield logo), this will search for Windows installations and allow you to tickbox it and Cleanup.