By default JBoss AS 5 is the most recent, supported version of JBoss AS in Eclipse IDE. You need an Eclipse server adapter for JBoss AS 7 and that’s what JBoss Tools tooling provides.
Installing JBoss Tools 3.3.0.M2
JBoss Tools 3.3.0.M2’s installation is a simple affair and boils down to a few clicks in the Help > Install New Software… wizard.
According to JBoss Tools 3.3.0.M2 Development Release page, you should use http://download.jboss.org/jbosstools/updates/development/indigo/ for the latest development release of the Core tools.
Select Web and Java EE Development category which includes JBossAS Tools and the required adapter (although the Details section below may have implied that it would not).
Once JBoss Tools is installed, you will see JBoss AS 7.0 server available in the Servers view.
Registering JBoss AS 7 server
Eclipse IDE has to know about the server location and other configuration settings. You use the Servers view of Eclipse to configure one.
Use an appropriate value for Home Directory where JBoss AS 7 CR1 resides.
The final result is as depicted on the screenshot.
You can manage the server instance easily. Start and stop it to ensure its proper working.