I used to shoot some sports but that was long ago, and mostly with manual focus equipment (Nikon F3). For a little while I shot skateboarding with a 9xi (and later a Maxxum 9) and used the 5400HS with good results. I am actually going to start shooting sports again this spring (sail boat races) but they don't move as fast as martial arts do and flash won't be practical.
You really have an advantage in that you already know the sport. You will be better prepared to anticipate his moves because you probably know them as well (maybe can't do them as fast, but can certainly see them coming sooner than most).
I haven't used flash much on the 7D (and what little I have was unimpressive to say the least) but I know you will need to watch your settings very carefully. A lot of the settings require the flash to fire a pre-burst to acquire exposure settings (or focus) and this will cost you so much time you are sure to lose the shot! (see "lazy eyes" posts)
When shooting action you may have more luck with the camera set to manual mode, shutter priority and manual focus with the aperture set according to the hyperfocal distance of your lens and the focus area you want. Unfortunately, most modern lenses make this difficult at best but it can still be done with a little math.
If you're shooting indoors without flash, crank that ISO up there. Don't be afraid of it for practice rounds because it will allow you to really get the hang of the timing involved in shooting like this. Once you feel comfortable and buy (or rent) a flash, you will know what it feels like.
ALSO!! If he is really sparring, be VERY careful as to where your flash is! The last thing you want is to fire a strobe into someone's eyes, temporarily blind them, and have them catch a sucker punch! It'll probably be the last time they let you shoot there! Just a heads up.
p.s. Here is a link to a DOF calculator
you can use to find the hyperfocal distance of your lens.