First thing is to repair the drive from your OS X DVD - Utility menu and select Disk Utility.
Next, make sure you have backups before beginning.
OS X needs to have 10GB or more, and 15% or more left after this.
Boot Camp needs to have free unfragmented space. You may need to backup and then format and restore to get all the free space consolidated.
Backup and repair before starting should be a given. Mentioned as step one in the pdf guide.
http://www.apple.com/support/bootcamp
40GB is what Windows 7 64-bit takes probably before even considering page file, hibernation file space temp and caches. Also, the SP1 update requires about 1GB file (you can remove that a week or two after) but also 9GB for performing the update (temp space).
So 50-60GB is not unreasonable at all.
If you need full hardware resources and access and don't want to share RAM and the rest then Boot CAmp is great. And if you want to run Windows as a guest OS under Mac, then you need to install Windows via Boot CAmp first, then maybe use Parallels 6 to share the Windows partition. You can't create a VM and then go Boot Camp path.