help re-formatting a HHD

Here is what has happened.
I am helping a friend with her HP pavillian dv 2131cl - with Vista home (32). The hard drive crashed and I have swapped out with a new HHD. Being it was a from Fryes & not in a box, I had to down load from the Western Dig site the recovery software- which turns out to be in Win 7 form (though on the website it said XP, vista & Win 7 compatible).

I popped in the CD the able to get the Acronis install screen-
But this is where I am stuck.
Once I install the Acronnis (and sorry not sure which version) then what?

I tried Spin Rite on the original HHD, it is so badly dmg'd that can not recover an Imaged file off the D Drive (HP partitioned the HHD so, C has the OS & D had the backups).
Is there an inexpensive recovery tool some one can suggest?

I take it I will need a valid copy of an OS (Win 7 vista, XP) to format the new HHD so I can start anew. Given Lap top from Costco there is no original OS disk or a recovery disk).

thanks so much in advance.