so that others do not also take your flawed advice:
Here's a snippet from the terms of use on the download site for the windows 7 RC:
... COPYING OR REPRODUCTION OF THE SOFTWARE TO ANY OTHER SERVER OR LOCATION FOR FURTHER REPRODUCTION OR REDISTRIBUTION IS EXPRESSLY PROHIBITED, UNLESS SUCH REPRODUCTION OR REDISTRIBUTION IS EXPRESSLY PERMITTED BY THE LICENSE AGREEMENT ACCOMPANYING SUCH SOFTWARE.
Here's a LINK, you can check it out yourself.... So, please tell me where in the license agreement of the Windows 7 RC you found the statement that it's allowed to reproduce or redistribute it? As far as I know Windows 7 does NOT include any such statement, and as such is covered by the general terms of use.
The image IS illegal. I don't think Microsoft is going to start chasing people redistributing a publicly available release candidate though, but that fact doesn't make it legal.