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One of Microsoft’s biggest challenges with Windows 7 is an easy upgrade path for consumers and corporations. As this chart illustrates, it’s a mess: Only a few upgrade paths qualify for an “in-place upgrade,” which means you can keep “files, settings, and programs intact from your current Windows version.” Most will require a “custom install,” which WSJ gadget guru Walt Mossberg describes as “a tedious, painful process” for “most average, nontechie consumers whose PCs have a single hard disk.”
I’m reminded of the 2006 If Microsoft Designed the iPod Box parody video. Commissioned by Microsoft’s own packaging team to humorously educate their marketers about the pitfalls of packaging & branding, it’s not really looking like they’ve learned the lesson:

I been running the 64-bit version of Windows 7 RC (Release Candidate) for awhile. I can tell you this much: there's no such thing as an upgrade path. You either start fresh or game over. Since I'm one of those types that saves all my working files (including desktops pix and bookmarks) on a separate external hard drive, no big deal. But most folks aren't techies. Once again, Microsoft blows it. And Windows 7 is better than Vista in many ways.
I have XP sp3 on a laptop and an older desktop, they both work just fine and XP does everything I need done. What is the incentive for me or others in my postion to upgrade to Window 7?
In other word, what does it do that XP doesn't?
Actually DQ, your best staying with XP SP3 for the foreseeable future. My wife and kids all have XP SP3 on their desktops. I'm the only one playing with the cutting edge. If Microsoft wants people to jump on board the latest and greatest, they should make the upgrade path much easier.
I'm on XP SP3 and skipped out on Vista, but I'm willing to try Windows 7 if the fall reviews are good, especially if Adobe apps run smoothly on it. I'm willing to nuke my desktop from orbit and start fresh because going 64 bit means I actually get to use all 4 Gb of RAM I have installed.
The problem here is that I am perfectly happy with XP, and have no great urge to buy any new laptops with Vista or Win 7 on them, unfortunately getting any new hardware with XP on it is practically impossible.