FWIW, I've done 3 different Windows 7 installs, one of which was an update from Vista. The update worked very well for me in that scenario with most applications properly migrated. No problems with that box.
Still if at all possible I always recommend a fresh install. Microsoft does have a Save and Restore settings wizard in Vista and Windows 7 that also work pretty good to preserve common machine settings and profile settings etc. I've found that pretty useful in a migration although even with a new install with htis you end up with dead gunk from the old machine in the registry.
If your current machine setup is clean and mean then an upgrade should be just fine. If your machine is dragging due to too many installed and uninstalled apps etc. - a new install is a better call. It's amazing how much of a performance difference a totally clean installation makes!
+++ Rick ---
>>I always install a new OS from scratch rather than upgrade, but so far everything I've seen about upgrading says it's painless.
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>Unless you're upgrading from XP. Microsoft strongly advises against it.
>
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>>Availability is Oct 22. In the US you can preorder from amazon.com. Not sure about the UK
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>>>2 questions; (1) everyone always advises against uprgading, and (2) when does Windows 7 become available?