Assuming Java (JDK + JRE) is installed in your system, do the following steps:
C:>echo %path%
C:\Program Files (x86)\Java\jdk1.6.0_27\bin;%CATALINA_HOME%\bin;
C:>echo %classpath%
C:\Program Files (x86)\Java\jdk1.6.0_27\lib\tools.jar;
C:\Program Files (x86)\Apache Software Foundation\Tomcat 7.0\lib\servlet-api.jar;
C:>echo %CATALINA_HOME%
C:\Program Files (x86)\Apache Software Foundation\Tomcat 7.0;
C:>echo %JAVA_HOME%
C:\Program Files (x86)\Java\jdk1.6.0_27;
Now you can test whether Tomcat is setup correctly, by typing the following commands in your command prompt:
C:/>javap javax.servlet.ServletException
C:/>javap javax.servlet.http.HttpServletRequest
It should show a bunch of classes
Now start Tomcat service by double clicking on 'Tomcat7.exe' under 'C:\Program Files (x86)\Apache Software Foundation\Tomcat 7.0\bin'.