Darryl, I'm sorry but I would like to change what you said a bit.
IMO, upgrading happens every time when you change your OS to a newer one. Upgrade can also be in-place upgrade, difference being that in-place upgrade installs on top of the existing OS, whereas upgrade replaces the old OS with the new one.
After in-place upgrade your applications are intact and can be used, whereas after upgrade you have to re-install everything. You can for instance upgrade from XP to Seven but in-place upgrade to Seven is only possible from Vista.
When migrating to a new OS, you have two scenarios: you can either upgrade your existing computer, or migrate to a new computer. If you are migrating using the same computer, part of this process is upgrading. It's then up to you to decide if you want to / need to upgrade doing a clean install, re-installing your applications, or in-place upgrade.