You can burn the various preloader 7100 7260 iso’s to a bootable disk but when you try to upgrade it won’t let you (try if you want) if you are upgrading from a later version (pre-rtm) windows 7 such as 7231.

After some research the easiest way I found and successfully upgraded from inside windows 7 7231 to 7260 was the following:

1) extract the iso (winrar) to a usb drive or different partition (d, e, f, etc.) from c:
2) while running windows 7, explore the extracted iso folder and find setup.exe
3) right click on setup.exe and click the compatibility tab
4) under compatibility mode change it to Vista SP2
5) also change it to “run as administrator” in the same tab
6) apply, ok, ok
7) now run setup.exe and enjoy!