You know you can upgrade to Windows 7 and keep all your settings, files, favorites, program, background picture etc etc as it is right?
Pop in the Windows 7 DVD and pick upgrade instead of custom new installation, no files will dissapere and you will keep all but GUI as it was 
You cannot do an in-place upgrade from XP to 7. You can upgrade from XP to Vista, then Vista to 7. Or, there's a program by LapLink called "PC Mover" which facilitates an in-place upgrade. It's pretty bad-ass and I've used it numerous times.
