The spectroscopic Sloan Digital Sky Survey (SDSS) Data Release 7 (DR7) galaxy sample represents the final set of galaxies observed using the original SDSS target selection criteria. We analyse the clustering of galaxies within this sample, including both the Luminous Red Galaxy (LRG) and Main samples, and also include the 2-degree Field Galaxy Redshift Survey (2dFGRS) data. Baryon Acoustic Oscillations are observed in power spectra measured for different slices in redshift; this allows us to constrain the distance--redshift relation at multiple epochs. We achieve a distance measure at redshift z=0.275, of r_s(z_d)/D_V(0.275)=0.1390+/-0.0037 (2.7% accuracy), where r_s(z_d) is the comoving sound horizon at the baryon drag epoch, D_V(z)=[(1+z)^2D_A^2cz/H(z)]^(1/3), D_A(z) is the angular diameter distance and H(z) is the Hubble parameter. We find an almost independent constraint on the ratio of distances D_V(0.35)/D_V(0.2)=1.736+/-0.065, which is consistent at the 1.1sigma level with the best fit Lambda-CDM model obtained when combining our z=0.275 distance constraint with the WMAP 5-year data. The offset is similar to that found in previous analyses of the SDSS DR5 sample, but the discrepancy is now of lower significance, a change caused by a revised error analysis and a change in the methodology adopted, as well as the addition of more data. Using WMAP5 constraints on Omega_bh^2 and Omega_ch^2, and combining our BAO distance measurements with those from the Union Supernova sample, places a tight constraint on Omega_m=0.286+/-0.018 and H_0 = 68.2+/-2.2km/s/Mpc that is robust to allowing curvature and non-Lambda dark energy. This result is independent of the behaviour of dark energy at redshifts greater than those probed by the BAO and supernova measurements. (abridged)
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