New MOBO + CPU in my XP case - Upgrade to Windows 7

[gmgj]

I have an existing dual boot ubuntu / Windows not retail XP machine. Two hard disks. I want to purchase a new mobo, cpu, another disk and memory (possibly a power supply) and "UPGRADE" the xp machine to Windows 7.

I am looking for some advice, opinion and information on these possible scenarios

1) Don't do an upgrade. Do a clean install on a new machine.
Pros - you get a working new machine without tons of old crap you might not want etc.
Cons - at least 2 weeks installing and reconfiguring everything, new case, power supply etc

2) Build a new machine and do Windows Easy transfer.
Pros -same as above
Cons -you get some of the legacy crap, I have never done this, don't know how much reconfiguration is involved.

3) Upgrade to a retail Windows 7 on existing machine, put in new components and reactivate
Pros - save cost of the case, hopefully minimal reconfigure
Cons- have to figure out a way to upgrade and target a new disk as the new boot disk

FYI
I have decided that dual boot or VM or not worth the time for my usage. I know use a separate machine for ubuntiu

 

[ScrewySqrl]

what's your budget? whats the current system specs?

 

[gmgj]

New machine
I do not want to spend a lot, certainly under a 1,000. Machine is word processor, web, email, web development, some C++. Want to run dual monitors. Add cd/dvd combo and a ReadyBoost usb to list of new components
Old machine
Processor Intel® Pentium® 4 Processor 524 with HT Technology
OS Microsoft® Windows® XP Professional Edition
System Board MSI MS-7211 (PM8M3-V)
System Memory 512MB DDR400 SDRAM 184-pin DIMM + 512
Hard Drive 250GB 7200RPM Ultra ATA Seagate
Spinpoint F1 HD502IJ 500GB 7200 RPM
DVD ±R/±RW Drive 16x Dual Layer DVD±R/±RW Drive
Video Via S3 K8M800 UniChrome +
dead Sound Integrated 6 Channel AC'97 Audio CODEC
LAN Realtek Integrated 10/100 Ethernet RTL8100C Controller
C-MediaSabrentSoundCard

More information
Windows 7 upgrade adviser says I should do a clean install (probably caused by Dual boot). I could try removing dual boot (http://www.supergrubdisk.org/wiki/UninstallGRUB)

 

[RetiredChief]

(1) When doing a upgrade to win7 from XP, it will do a clean install and save old settings and your data in a seperate directory labeled old something. You will still have to reinstall all programs - Win 7 comes with a good set of drivers. So might as well do a clean instal, just select custom instal from the upgrade disk. (There are two additional set to doing a clean install using an upgrade DVD - can google, or I can provide)

(2) I would go for an upgraded computer, Even a low end I3 would probably run circles arround your current configuration, an I5/I7 build definetly would. Cost from approx 400 to 600 bucks.
.. Proc approx $100 (I3) -> $200 (I5)
.. Memory Approx $80 -> $100 for 4 Gigs
.. MB Approx $100 -> $150, depending on features you want
.. Video card Approx $100 -> $200 - Based on your gaming need.
... HDD, DVD Drive can be reused and/ or replaced at a later date. (However if your drives are PATA (IDE) and not SATA, I would probably replace)