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As Billymayday said, the DVD is a complete distribution. It will allow you to set up your system just as you want when you do the install. When I did my install I mounted the DVD image on another machine and performed an NFS install. Take a look at Chapter 6 of the Fedora 7 Install Guide for other options.
Yes. Fedora 7 includes a DVD image that has the features of a regular installation. We don't provide CD variants for the regular installation. The DVD image includes a subset of the Fedora repository which has around 7500 packages. CD variants of the regular installation have been provided unofficially by the community at