I'm not really sure what you mean by Windows 7 Pro 32 bit with XP mode.
I would start by checking the system requirements against yours. http://windows.microsoft.com/en-us/windows7/products/system-requirements
If your laptop can handle Windows 7 I would then take a backup of all of your data on the laptop. The Windows upgrade might not reformat your hard drive, but better safe than sorry. Then it is basically inserting the Windows 7 disk and following the prompts to install the OS.
I personally would suggest you have over 2GB of RAM in your computer as a general guideline to run Windows 7.