I'm sorry but I'm a tad confused here, are you trying to do an upgrade or a clean install? If your trying to do an upgrade than I'd suggest doing a clean install.. Which is just a matter of booting off your win 7 installation disc then formatting your HDD OR just the partition you wish to install 7 on, then installing win 7..
I wouldn't go the upgrade route simply because it often times presents errors such as the one's you are getting...
It could be your ISO though.. it may be corrupt.. I'm not sure why Nero would be saying it can't be burned as an ISO unless it's compressed.. if it's compressed than you just need to extract it first than burn it..
I wouldn't use build 7057 as it's known to have alot of problems.. 7077 should work fine or one of the older builds (7000, 7022, 7068)...
With the RC so close to being released though you'd be further ahead to just wait really.. it sucks to wait I know, but it would save you the hassle of just getting one of these builds installed then have to turn around and install again...
But that of course is up to you....
Operating System Windows 7 Ultimate 64- Bit Edition
Computer Type Custom Build 6 of 6
CPU Type and Speed AMD Phenom II X4 965 (3.4GHZ) 4000MHz HT Quad-Core Socket AM3
Motherboard Chipset Asus Crosshair III Formula AMD 790FX Socket AM3
System Memory Type Corsair TR3X6G1600C8D Dominator - DDR3-1600:PC3 -12800 - 6GB - Non-ECC Unbuffered 240-Pin DIMM
Video Card Type and Speed Sapphire Radeon HD 5870 1GB PCI-Express (2.0)
Computer Monitor Samsung SyncMaster P2350 23" FULL 1080p HD LCD Monitor
Hard Drive (2) WD VelociRaptor 300GB 10000RPM 16MB Buffer: (2) WD Caviar 1.5TB "IntelliPower" 64MB Buffer
Optical Drives (2) LG 22x Super Multi Drives (SATA II) - Both with Lightscribe
Network Adapter Asus Crosshair III Formula Gigabit Ethernet Adapter
Anti-virus Software AVG Free Edition 9.0
Computer Skill Level Self-Taught Expert
Windows Experience Index 7.2