I'd go with the other recommendations and use Virtualbox I think
Or you could rig up something really lightweight with qemu, I have a pocket vm I used to carry around that was entirely portable (i.e would launch on any windows host where I had admin access from the USB stick where it lived)
The only thing I would say is for a Win 7 machine you are really very short on RAM as it is. If you try and dedicate more than 128MB of Ram to that VM things are going to get very sticky for both the host and the guest machines.