To migrate to Windows 7, you should be able to insert the Windows 7 disc. Boot the system off of that disc and it will give an option for a upgrade install to keep all your data or perform a new clean installation which formats the hard drive and installs Windows 7 clean.
Prior to doing this I would run the Windows 7 compatibility utility to make sure the system meets the requirements etc.
What are the system specs of the system you are upgrading to Windows 7?
If its Windows 7 32-bit I suggest a minimum of 2GB RAM, and if its Windows 7 64-bit I suggest 4GB for best performance.
Windows 7 32-bit can run on 1GB of RAM, but it would be laggy with all the paging to operate with the HDD. Windows 7 64-bit on 2GB of RAM has been laggy.