Paul Thurrott posted part 3 of his Windows 7 review
For the most part, Microsoft's supported methods for installing Windows 7 closely mirror those for Windows Vista. In some cases, such as the interactive Setup routine that very few people will actually use, the process has been simplified, in keeping with the general Windows 7 mantra. Elsewhere, however, life has become more difficult for users, especially those still running Windows XP who wish to upgrade their existing PCs. (This, too, is probably a pretty small crowd, relatively speaking.)Windows 7 Review Part 3: Installing, Upgrading, and Migrating
From a technological perspective, the Windows 7 Setup routine is simply the next version of the image-based Setup that debuted with Windows Vista and Windows Server 2008. It features the same basic installation phases, can be serviced and updated in the same ways, and supports in-place product edition upgrading. For this reason, all retail versions of Windows 7 include the code needed to upgrade in-place to a higher-end product edition. The product key included with the retail packaging determines which version you can activate.