ALWAYS ALWAYS ALWAYS backup when upgrading from and to any OS. You can never be too careful.
I'd back up the contents of the [DRIVE]:\Users\[USERNAME] to an external HDD as well as her .PST file if she uses Outlook. If not, Backing up just her User folder should cover Windows Live Mail's email storage tactics.
This is just in case something goes terribly wrong.
Run the Windows 7 Advisor to check for any possible hardware conflicts or out-of-date software that may not play well. Download details: Windows 7 Upgrade Advisor
Once everything is in order to your satisfaction, boot up the machine, log in to Windows and pop in the Windows 7 disc and choose Upgrade (the other option will be greyed out so that's pretty much a drrr there)
After it's all said and done, make sure to update your drivers for your respective hardwares and devices.
Have fun! Let us know how it goes!