I do not know for sure, but it sounds like:
1) you are running from the CD and not from your hard drive
2) you need to install an OS to the harddrive
3) Ubuntu 7.10 is over one year old and you should request a new disk from
Canonical. They pay the entire cost. See below.
4) if time is critical, then you should go ahead and install 7.10 and then
update, provided you have a broadband connection. If you use dial up, then
request a new CD from Canonical as this will mean fewer updates at:
https://shipit.ubuntu.com. The latest version is 8.10.

To install 7.10 you need to click on the icon on the desktop. If there is
nothing else on your computer just accept the defaults, only changing your
location and keyboard.