I don’t think you can go from xp to win 7, I’m not an expert.
However, Windows has a much improved files and settings transfer utility dubbed "Windows Easy Transfer".
To use the the Windows Easy Transfer utility you will:
1. Login to XP
2. Insert Windows 7 disc
3. Navigate to \support\migwiz folder
4. Double-click migwiz.exe to launch the utility
5. Follow the instructions to save your files and settings to another PC using a cable, network drive/folder, or you can save them to a hard disk or USB device.
6. On the Windows 7 system, run the utility again by navigating to Start>All Programs>Accessories>System Tools>Windows Easy Transfer. The utility will then help you copy the files and setting to the new setup using the backup file your created in step 5.
Warning: Backup your files BEFORE you attempt this transfer. Whether you backup to an external drive or an online backup service, or to CD's or DVD's, just be sure to safeguard your data first.
Note: An Easy Transfer Cable is a cable designed to work with Windows Easy Transfer wizard. A USB cable will not work. You can find this cable online at quite a few stores. You can find some retailers who carry it here.