What do you mean by "Cannot perserve the file". It's clearly a typo but "cannot preserve file" makes no sense to me either.
Windows 7 consists of two partitions, a tiny (hidden) system partition of around 100Mb and the main partition containing the rest of the operating system that is visible in Explorer.
Both partitions need to be present for Windows 7 to boot, but if you happen to be trying to restore the "main" image file to the tiny system partition (usually partition 1), then of course that is going to fail as there is not enough space for it.
If you are using WinPE, have you added the appropriate Vista 32 bit drivers for your NIC and SATA chipsets? If booting WinPE from the USB stick, you should not need the NIC driver, but you are going to need the SATA driver if you want WinPE to be able to access the hard disk. You need Vista drivers because the version of WinPE that ships with 11.5.1.2266 is based on the Vista kernel. These drivers can be added via Ghost Boot Wizard, but make sure they are selected before rebuilding the WinPE boot image.