I will leave dual booting for others to describe. A few years ago I dual booted XP and Windows 7 for a couple of months and quickly got rid of it in favour of windows 7 alone. I would, if I were you, go straight for Windows 7. I do have all my original installation discs for programmes and I keep all my self generated data on a separate partition, so in my case I copied the data partition to an external drive , then re imported it to the new data partition after all windows 7 and associated programmes had been installed.
Do wait for other views!!