In the general case we can complete the square as follows:
y = ax^2+bx+c = a(x+b/(2a))^2+(c - (b^2)/(4a))
Notice especially the b/(2a) term, which gives us the -4. Normally you just observe the a and b terms and look at what you get when you multiply out a(x-b/(2a))^2 rather than following the above formula. On this occasion, let's just use the formula...
In our case a=1, b=-8 and c=7, so
y = x^2-8x+7
= 1*(x+(-8)/(2*1))^2+(7-((-8)^2)/(4*1))
=(x-4)^2+(7-64/4)
=(x-4)^2+(7-16)
=(x-4)^2+(-9)
Vertex form of a quadratic is:
y = a(x-h)^2+k where (h,k) is the vertex.
So in our case (h, k) = (4, -9)
Why is this the vertex?
Well (x-h)^2 >= 0 will only be zero when x-h = 0 - that is when x = h. When x=h then y = 0+k = k, hence (h, k).