A quote from a Microsoft spokesperson “I can confirm that customers will be able to purchase upgrade media and an upgrade license to move from Windows XP to Windows 7 - however, they will need to do a clean installation of Windows 7,” a Microsoft spokesperson confirmed to The Register. “This requires the user to back up their data, install Windows 7, re-install the programs and restore their data.”
Windows Vista users, however, will have the option to install over top their existing OS.
http://www.tomshardware.com/news/windows-xp-7-upgrade-vista,6965.html
