Hi Srini,
I can answer your question only about licensing issue. I'm not a technical specialist.
for licensing, I confirm that with your datacenter Edition you have unlimited VMs for Windows Server instances.
for installing a Windows 7 Image on the 2 VMs, you need to have an active Software assurance for your Windows Clients (includes VDA benefit) OR you add the VDA subscription license on your existing Select plus Agreement for each device wants access
to Windows 7 on the Server.
with the VDA licenses you can download Windows 7 pro(free) from VLSC and install it on the Server and each device licensed with VDA have access to Windows 7 VM Image on the Server. if the existing devices have a qualified OS like Windows 7 pro, XP pro,
Vista Business, ... you may install up to four VMs of Windows Clients on the licensed device with VDA.
I hope that it is clear about licensing issue. if you have more licensing questions do not hesitate to ask me.
thanks
diramoh