Yes you can use Windows 7. Install AirPort Utility for Windows from the CD that came with your Time Capsule onto your Windows machine and you'll be able to configure your Time Capsule without any issues.
As for continuing to use your WRT54G router, it's not necessary. You are able to have two separate SSIDs
and a guest network with the Time Capsule. If you still want to use it (can't bring yourself to get rid of it, need the extra Ethernet ports, etc.), here's a thread that will help you set up your router properly:
https://forums.macrumors.com/threads/847436/
To set up dual mode, you need to do so in AirPort Utility. Enter Manual Setup and navigate to the Wireless tab. The options to set it up will be in there.
You could always keep your old Time Machine backup if you truly need those files. You should be able to navigate through the old drive and pull any files you need in the future.
Edit: In the Wireless tab, there is a drop down selection labeled "More Options." Select Wireless Network Options, check "5 GHz Network Name" and enter a unique name for the network. Then you'll be set up for dual networking. And for the guest network, select the Guest Network tab and enable it, providing it with another unique name.