Ok, you don't have a DVD burner, just get an external usb hard drive and make the image to it.
Get a sata to usb housing
(such as a hxxp://www.newegg.com/Product/Product.aspx?Item=N82E16817392032)
then put the new hard drive in the computer and boot to your old hard drive in the usb enclosure, do the image to the new hard drive, make a rescue cd. You should be able to boot to the rescue cd and do a restore from the image on the new hard drive.
I prefer to just have an external hard drive handy any ways.
I hate doing a new install from scratch when there are a lot of updates. Just did one on Vista and it took almost 2 days just doing updates.
If I already had an external drive I would (do as many say and) copy my existing OS to the new HD, but I don't want to buy anything just to save a few hours of downloading. I already downloaded all the necessary drivers to a USB stick, and I downloaded WIN7 SP1. As soon as my new drive comes in I'm ready to go with an install from scratch.
The suggestions to have an image saved (just OS and drivers) for a fast reinstall is a good idea, but I don't do many computer builds so I'm not going to worry about that step. But I will do a backup image and a rescue disk.