If you downloaded the Windows iso it then needs to be copied at 2x/4x speed in order for it to be seen. Most of the time it seems Disk Utility can't record the Windows iso installer at a faster speed. Make sure your making a Bootable copy.
Unfortunately it seems yours isn't supported using W7 64bit according to Apple and may not work. 32bit is fine.
If you do a Yahoo/Google search some people have been able to install 64 bit Windows on certain "unsupported" models but it may be a little tricky if you don't know what your doing.
You don't need a Windows machine to burn the iso to a DVD, if you use "Disk Utility" just burn it at the slowest speed possible and it should work. (unless your doing the work around to get it to work)
Just make sure you use a program that will make it a bootable image tho, you can't just drag the files over to it and let it burn, it has to end up being bootable in order to boot into the installer.
Apple (Boot Camp) will only support NTFS so as part of installing Windows 7 just chose NTFS as the format while booted from the Windows installer.
Basically, start Boot Camp Assistant, download the drivers, make the partition size you want, (doesn't matter what you format it as now, Windows will do it again with the one you need) it will then boot into the Windows installer and you will eventually get to the part where you can format it to NTFS, it will do it's thing and reboot into the new Windows 7 desktop and you will then install the drivers.