Words Of Wisdom on 27 March 2010
Do not upgrade.
If you want Windows 7 then do a fresh install. There are all kinds of bugs associated with upgrading and Windows-centric forums are filled with people who upgraded and suffered random crashes, BSODs, and other failures... none of which you get with a fresh install of Windows 7.
A 500 GB HDD is pretty darn cheap these days ($50-$60) so just snag one and backup your files. Besides, an extra 500 GB is always handy.
