"Upgrades to Windows 7 from the following operating systems are not supported:
* Windows 95, Windows 98, Windows Millennium Edition, Windows XP, Windows Vista® RTM, Windows Vista Starter, Windows 7 M3, Windows 7 Beta, Windows 7 RC, or Windows 7 IDS
Just found this via a technet email I got. So, looks like if you're using the RC, you're going to have to do a fresh install once the time limit expires.
If I'm reading this wrong, please correct me. But it looks like that's the case... I put RC1 on my wifes system 2 weeks ago and it works great, didn't have to install any drivers for anything ! not even the video card (4670 ! )so... shouldn't be a huge deal to reinstall once it stops working.
As you say not a big deal to install a new W7.
You can use the W7 Easy Transfer Wizard to backup all your data files and settings, reinstall your programs then use ETW to restore the data and settings. This works very well.
If you keep your media files and photos which take a lot of space, on a seperate drive/partition, the backup and restore will be fairly quick.