Be careful to write down everything you need. I am dual-booting XP and Windows 7 RC 64bit. I used Acronis Disk Director to add another partition. I then installed Windows 7 to the second partition (do not upgrade your XP).
I definitely would dual-boot, at least until your comfortable to switch over.
Another option is to pull out your XP drive and use a new one for Vista or Windows 7 x64 in case you need to switch drives for whatever reason, it happens a lot.
You cannot actually "upgrade" a 32 bit OS to a 64 bit OS. Though you can use an "upgrade" version of Vista 64 to upgrade XP 32 to Vista 64, (or 7) it basically will do a complete fresh install. So yeah, save your data somewhere and prepare to reinstall all your software.