I still prefer the dual boot method of installing 7 on a partition and then phasing out XP. Great tutorial for that here on this forum - in fact, it's how I found these forums. I was searching for the proper method after testing Ubuntu 10.04 and I was lead here.
There are a few caveats, also covered in these forums, such as retaining restore points during the transition and, once finished, porting the MBR over to the 7 partition and reclaiming the XP partition.
I find myself booting into XP less and less especially with XP mode available.
Off-topic, is there a way to port the existing XP installation to a Virtual installation that can run in Win 7?