I agree clean install is the way to go.
I predict Win 7 will be the major upgrade path for XP users. This platform is fantastic. I have been using it for months and I develop software so I really put my machines through a brutal work-out daily and this is by far the most stable OS from Microsoft yet.
Before this I had to install Windows Server 2008 as a workstation to get this level of stability.
It is fast as well and there are some really great improvements to the user interface.
If you are wondering about the upgrade path...just by an upgrade to Vista now, hold onto it...you will receive a free upgrade to Win 7 and you can go from XP to Vista right to Win 7 in a two step upgrade. I would say though that clean install is the way to go.
As a XP-SP3 user and know just enough to be dngerous, how much memory is required to see SIGNIFICANT performance upgrades to warrant moving to W7?