I was a Vista beta tester way, way back when it was called Longhorm Build 4015
I never upgraded any of my XP machine to Vista, it was just not quite right even when it was released.
Win7 will be great with the right hardware. So yes some people will have to upgrade to new computers. You just have to weight the Pros & Cons of everything involved.
So I see your point with your family members, too. Good Luck & be OpenMinded.