I'm going to reinstall my Windows 7, but when I bought this PC it came with Windows 7 preinstalled and the product key is on a sticker on the PC's case. I have downloaded a Windows 7 Home Premium ISO file from here and I do believe that this download is legal as I found it from superuser.com a while ago. What I'm asking is: will I be able to use my OEM key to install Windows 7 from this ISO file?
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Yes, it will work as long as you are installing the edition you have the key for. For example, if you have the key for Windows 7 Home Premium it will work if the downloaded image is of Windows 7 Home Premium. Service Pack doesn't matter.
Cornelius
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Contrary to the accepted answer: maybe.
It all depends on the ei.cfg file found within the Windows ISO which will state whether or not the image is treated as an OEM version or a full retail version.
If you try to use an OEM licence key with a retail version then it will install, but won't register and activate - and vice versa.
However all is not lost, you can change an ISO between the two types by using the information posted at Reinstall Windows 7: OEM or Standard?