Using the DVD ISO as a Source
1. Loop mount the image:
mount -t iso9660 -o loop /path/to/image.iso /path/to/mount/point
name=Fedora 7 - Moonshine - i386 - Loop Mounted ISO Image
3. The default enabled=0 makes sure to not cause issues when the image is not loop mounted. You will be able to set the repository source enabled when doing repository configuration while running yum. In this use case, it would be needed to disabled (uncheck) the network based F7 repository when using the loop mounted image as the same data is available locally.
P.S When posting please be more descriptive