Is the Windows 7 OS disc supposed to be both 32 and 64 bit? or could it just be a 32 bit only? 

Run the Windows Upgrade Advisor to check for a hardware or other conflict. If it's an upgrade disk, you need to start it from within Windows and select Custom Install, reformat the disk by using the tools on the windows 7 dvd and then install 64bit. Read all of the answers on this FAQ page.

Edit- You should have mentioned what operating system you have now and whether it's 32 or 64 bit.

We downloaded it from the Microsoft license website.  There was only one option to download.  I'm guessing it should have both versions, that is what I've found on other searches.  It will do both upgrade and full install as it is a volume license.  I am trying the full install, I did not have Vista on it, it was XP pro 32 bit before, but I have formatted the hard drive (twice).

I did run the upgrade advisor before trying to install and the only warning I got was about having to re-install some programs, no hardware warnings.

Thanks

Windows 7 is available in either 32 bit or 64 bit seperately not together, you apparantly downloaded the 32 bit version. On Microsoft web site you have to select  which version you want before it takes you to download page. You can try downloading again but be sure to select 64 bit version. Don't know if product key you received with 32 bit download will work for 64 bit.