When you upgrade your pc to Windows 7 from vista, you will get a folder called windows.old that will contain everything that was on your hard drive before you upgraded, that is, if you chose custom install. If you chose to just wipe everything and upgrade, you won't have that folder. Your computer will be brand new, but everything will be gone. You cannot "use" windows.old to downgrade, as it is just everything that is on your main drive (yes, everything). What is in your "$WINDOWS.~Q" folder?
To downgrade, I would recommend backing up all of your stuff onto an external hard drive, or onto the "Cloud", and doing a clean downgrade, and wiping everything.
Sorry if this is a bit confusing to read. I was never good with paragraph structure