I have been to a number of Win7 Rollout sessions sponsored by the local Microsoft Office. Generally, what I hear is backup, restore data fresh. Do not Migrate. I have been running Win7 and found for my migration, a sep partition with a backup was the best bet. Allowed fresh install. Reimport Bookmarks, mailboxes, etc after the fact.
It is possible to move it to a 7 OS. But it might be somewhat of a hassle. You cannot simply upgrade from XP to 7. You have to do a clean installation. A solution would be what JNRII suggested. Another solution would be to move any files you care about on to another HD or DVD(s) and then do a fresh installation and then copy the files back onto the HD, but that I know is time consuming and complicated. There are a couple of ways, but all in all,, yes you can move the data from one installation to the other.