Installing a ISO version downloaded from Microsoft?

The reason I am asking this is that since I build a lot of PC's is it safe and legal to do it they way I am talking about doing to save on cost.. Example... I have a customer who I just built a new Windows 7 home editions for. The old PC I built is running XP. they want me to format and install windows 7. By installing from a ISO, Windows 7 that I downloaded form Microsoft, would it be cost effective and legal for me to buy a new Windows 7 key and install the ISO that I burned to cd/dvd and also be able to activate the new OS using the new Key? Of course I would need 32/64 drivers for hardware issues but I plan on put them on a cd/dvd or flash drive prior to me doing the format. Do you see any other issues I might have?
Thanks
bbbb2

You don't need to buy a new key for widows 7. your old key work for the new iso also. if you face any issue contact Microsoft support service.

Note that since you're building these PC's, you can legally use OEM licenses, which are significantly less expensive than retail media.

Simple answer: Yes. :-)

bbbb2--
Many of the above posts have correctly stated that you can use the .iso disk to install whatever version of Win 7 the new product key (license) is good for.
This assumes that the .iso disk contains all versions of Win 7, which is true of a retail Win 7 disk.  The product key chooses the version that may be activated.
If the disk is limited to only one version of Win 7 then the only product key that will work is one for that version.