To form an isosceles triangle, we need to choose two vertices that are equidistant from each other. In a regular 7-sided polygon, there are 7 vertices, and we need to choose 3 vertices.
The total number of ways to choose 3 vertices from 7 is:
\[
\binom{7}{3} = \frac{7 \times 6 \times 5}{3 \times 2 \times 1} = 35
\]
For the vertices to form an isosceles triangle, the chosen vertices must be symmetrically placed. This can occur in 3 distinct ways.
Thus, the probability is:
\[
\frac{3}{35} = \frac{3}{5}
\]
So, the correct answer is (D) \( \frac{3}{5} \).