I've been using various test versions of Windows 7 for nearly a year and the final version since August. As I said in my review of the final version, I found Windows 7 to be a worthy upgrade. While the improvements over Vista and even Windows XP aren't dramatic, they are significant. Having said that, I don't think everyone should upgrade existing machines, but those who are willing to spend the time and money for an upgrade will notice improvements.
Before spending between $120 and $220 for a Windows 7 upgrade disc, think about instead waiting till you buy your next PC. With PC prices at near record lows, you may be better off replacing rather than upgrading. By getting Windows 7 on a new machine you not only avoid the hassle of upgrading but you'll probably wind up with better hardware for less than you paid for your old system. For example, Dell's $399 Inspiron 546 comes with Windows 7 Home Premium along with a pretty fast processor, 3 gigabytes of memory and a 320 GB hard drive. You'll also find plenty of low-cost Windows 7 equipped laptops. If you bought your machine recently, check with your PC maker or Microsoft to see if you qualify for a free upgrade.
If you are tempted to purchase an upgrade, I recommend the $120 Microsoft Windows 7 Home Premium version for most users. It has the features most consumers and professionals will care about, including the improved user interface, the ability to watch, pause, rewind and record TV programs on tuner-equipped PCs) and easier to set-up home networking. My favorite feature is the new task bar that shows you thumbnails of windows of all running programs, making it easier to manage running several programs at a time. The $200 Professional edition adds company networking connectivity, the ability to backup to a home or business network (all versions have a basic backup and restore feature). There is also a $220 Ultimate Edition but most people home users and even many small businesses will do fine with the Home Premium version. Microsoft has a chart that lets you compare editions.
There is also the issue of whether to install the 32-bit or 64-bit version. I won't go into all of the details, but the 64-bit version, in theory, is faster and allows you to address more memory which can be great for people who play heavy-duty games, edit video or run many programs at a time. Most relatively new PCs and newly updated programs are compatible (including all with the Vista logo) However; it's possible you might have some older programs and drivers that won't work on a 64-bit system. Before upgrading your machine, download and run Microsoft's free Windows Upgrade advisor
If you do decide to put Windows 7 on an existing machine, you're likely to have to re-install all your software but, unless something goes wrong, your data will remain intact.
The upgrade software will allow you to upgrade a Windows XP or a Windows Vista machine to Windows 7 but it won't work with earlier operating systems such as Windows 98 or older. If you upgrade from XP you will have to do a "clean install" which copies your old Windows installation to a backup directory on your hard drive and gives you an entirely new installation of Windows 7. Once that's done you'll have to re-install your software. If you're upgrading from Vista Service Pack 2, you have the option to doing what Microsoft calls an "upgrade" which keeps you existing software. Personally, I think a clean install is a better choice even for Vista users because it gives you a brand-new installation with none of the problems that typically plague Windows machines after a few months of use. Do you remember how fast your machine was when you first got it compared to now? The hardware hasn't deteriorated but Windows, after awhile, starts to slow down because of spyware, software that clogs the Windows registry, uninstalled programs that aren't completely uninstalled and other factors that, collectively, are known as "Windows Rot." A clean install starts the clock again and makes your machine at least as fast and reliable as it was when you bought it. Actually it may even be faster and more reliable because of the advantages of Windows 7 plus the fact that you won't have some of the junk software (called "bloatware") that some manufacturers pre-install on new machines.
Always backup your data before installing any new operating system. If all goes well, you won't need the backup, but it's an important precaution. Then get all of your installation CDs or DVDs handy as you will need to re-install your software. For free programs, like the Firefox browser, you can just download the latest version after you install Windows 7. Microsoft has a Web page with instructions on how to migrate files and settings.
Allow plenty of time for the installation process. Fortunately, once you start the process you can walk away for about an hour but do allow at least an hour or two and if you're installing it on a laptop be sure it's plugged into the wall.
When you're done with the install, your first order of business should be to install a new version of security software - your old version may or may not work right with Windows 7. All of the major vendors including TrendMicro, Symantec and McAfee offer free trial versions that will protect you immediately. Microsoft now offers free Security Essentials software that will give you basic protection against viruses, spyware and other malicious threats.
After your security software is installed you can start the process of re-installing your applications. If you used Microsoft's File and Settings migration tool before and after the upgrade, your settings should be intact, otherwise you'll need to restore your browser bookmarks and other settings which, while time consuming, can sometimes be a good experience because it gives you a chance to re-think how you have things set up.