The ability to upgrade to Windows 7 with existing Windows XP or Windows Vista usually raises many questions and difficulties. Microsoft created a small table (see below) to clarify the situation, but it caused an even greater wave of misunderstanding.

There are two types of installation listed in the table, we will focus on them in more detail:
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In-Place Upgrade - update an already installed OS. In this case, it will be possible to select the Upgrade option after booting from the installation disk or after running setup.exe from the latter within the operating system. In this case, the installed programs and their settings will be saved.
Custom Install is a very vague concept and can mean anything. In this case, this means that you have to copy your data (via Easy Transfer Utility), format the hard disk, install Windows 7. After that, import the saved data and settings of your programs. By the way, this is the only way to transfer data and settings from 32-bit Windows to 64-bit. Also this method is the most time-consuming and most time consuming.
I prefer installing to a preformatted hard drive. In advance it is desirable to make a copy of the available information. The Windows Transfer utility copes well with the transfer of data, but God protects the safe. The Windows Transfer utility also transfers the settings of installed programs and system settings (wallpaper, DPI, sounds, etc.); It works with most types of external media and network drives.
With a large number of computers, in the office environment, useful utilities of the modern administrator will come to the rescue: MDT and USMT. First - Microsoft Deployment Toolkit 2010 allows you to customize the installation based on the specific needs of the organization. It is free and is in beta under development (work with Windows 7 is being added), then you can distribute the installation over the network to one or thousands of computers using Windows Deployment Services or System Center Configuration Manager. Also, a modified installation image can be integrated with User State Migration Toolkit 4.0. The latter is a kind of Windows Easy Transfer utility, but at the corporate level. The special creep of User State Migration Toolkit 4.0 is that it is capable of migrating data from 32-bit OS to 64-bit OS. In combination with Microsoft Deployment Toolkit 2010, the most powerful admin tool is obtained when it comes to hundreds and thousands of workstations.
There is already enough documentation and video guides written on this topic, as Microsoft will touch on this topic at the TechDays 2009 conference series.
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