Snippet from the Engineering Windows 7 blog on how to upgrade a Windows 7 Beta to Windows 7 RC, tho this is not the recommended (do a clean install instead) method of installing RC
1. Download the ISO as you did previously and burn the ISO to a DVD.
2. Copy the whole image to a storage location you wish to run the upgrade from (a bootable flash drive or a directory on any partition on the machine running the pre-release build).
3. Browse to the sources directory.
4. Open the file cversion.ini in a text editor like Notepad.
5. Modify the MinClient build number to a value lower than the down-level build. For example, change 7100 to 7000 (pictured below).
6. Save the file in place with the same name.
7. Run setup like you would normally from this modified copy of the image and the version check will be bypassed.