Best Method to Install

I’ve just purchased the windows 7 Key only for a PC that I have thats still running XP and I was hoping if you could tell me the best method of going about the installation given that only the product key is supplied. I take it that it can just be downloaded. I do have a couple of Windows 7 installation disks that came with my other PC’s but they are for ‘Home Premium’ and ‘Ultimate’ so...