I’m a technical guy myself (lots of schematic capture, PCB layout, and 3D CAD work). And because I travel a lot, I use a wide-screen 17” laptop.
I LOVE Aero for the ALT+TAB and taskbar preview alone; it GREATLY improves my productivity because I can find the right datasheet/document that I need right at that second (having 8-10 data sheets and 4-5 browsers open for different documents makes things cluttered).
Your engineers are smart to demand Win7; it’s a great productivity boost for those who need to look at multiple documents in parallel.
One of our engineers does architecture on the side and he went from XP to 7. He would not even mess with Vista though his wife did and she hated it. He says 7 is the best OS he's seen come out of Microsoft since XP and he loves it to death. My daughter uses 7 at her job at Purdue University. They also made the jump from XP to 7 without investing in Vista. She also loves it.
I thought about putting it on my computer but I'm still running a P4 3.4 GHz with only 2GB of memory, not enough to run 7 effectively.