Windows 7/Hard Drive Upgrade

So I am looking into upgrading to Windows 7 64 bit from my current Windows XP 32 bit, but at the same time I am going to install a new 500gb hard drive to replace a 250gb. I have about 139gb of information currently on the drive.

My question is this should I do a full install of Windows 7 oem onto the new hard drive or should I do a custom install on the current hard drive and then transfer the data to the external hard drive and then back to the new hard drive once installed?

My "Common sense" tells me to store my current XP data externally, install the new hard drive and do the full version of Windows 7 and then load the external information, but will the 64 bit Windows 7 recognize and except my 32 bit XP data if I don't do a custom install?

Is my "common sense" an idiot...

My current computer configuration was cleared for the 64bit upgrade by the Windows 7 Upgrade Advisor. The upgrade will allow me to access 8gb of ram where my immediate set up of 32 bits only allows for 2gb.

Thank you for the help,
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  1. Your common sense is right again!

    Just be careful with Win7 OEM installs. the OEM version does not like CPU/motherboard/HDD changes, and does require a phone call to Microsoft in order to validate subsequent installs.
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