Microsoft Outlines The Rules For Windows 7 RC Upgrading

The bottom line is this: if you want to upgrade to Windows 7 from RC, you are going to deal with some crap.

Apparently, a Microsoft spokesperson has confirmed that "you will not need to reinstall an older version of Windows before using an Windows 7 upgrade disk." Awesome right? No, not really. The problem is that you will not be able keep your current programs and data using this method. Instead, you are performing a "custom installation" that will herd all of your personal files into a folder labled "WINDOWS.OLD." The items in that folder are dead to the world, so you will have to reinstall—essentially making it more like a fresh install than an upgrade. However, since you don't have a full copy you would have to install XP or Vista first then upgrade to Win 7 should you ever have to reinstall down the line.

Yeah, it's kind of a hassle, but we can always hope that the process will be simplified before it goes live on October 22nd. [TechBlog]