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There is a lot of confusion around the upgrade and migration scenarios for people thinking about moving to Windows 7. You may have seen the eye chart (below) put out by Microsoft that attempted to clear things up but from what I have heard this has caused more confusion rather than clarify things.
First lets look at the two install types listed in the chart:
In-Place Upgrade - An In-Place Upgrade is simply inserting the install media and starting an upgrade from within the OS, or by choosing the Upgrade option when booting off the install media. This will keep all your applications and settings in place and is the most straight forward path.
Custom Install - I think this is where the confusion lies as Custom Install means a lot of different things and can be accomplished a number of different ways. The most basic of these installs is to back up all your data, format the hard drive and install the new operating system. Once that is done you can install your applications, copy your data back and reconfigure your system. This is the only way to move from 32bit to 64bit and it is also the most time consuming way.
Personally I always prefer a clean install. One way to simplify this method, and my preferred way of migrating to a new OS (or even when reinstalling the existing OS) is to use the Windows Easy Transfer utility to backup my existing installation and then restore to the new installation. On top of backing up all your data Windows Easy Transfer will back up any system customizations (wallpaper, DPI setting, sounds, etc…) along with application settings. Simply run the tool on the current system and back up to an external device. Once complete, format your PC and install the OS and then run the tool again to restore. There is a great write up here detailing the steps on how to use Windows Easy Transfer to backup and restore settings. This tool can be used in every single one of the custom install options listed in this diagram.
Now in a corporate environment you are not going to walk around to 5, 10, 100, 1129 computers, run Windows Easy Transfer, install the new OS and then restore the settings are you? Well you can, or you can take the lazy admin approach and automate things with USMT and MDT.
Microsoft Deployment Toolkit 2010 is the tool to create custom images for you to deploy onto PCs into your environment. It is free, currently in Beta 2 which adds support for Windows 7 among other things and can be integrated with Windows Deployment Services (WDS) or System Center Configuration Manager (SCCM) as well. It can also be integrated with the User State Migration Toolkit 4.0 (USMT). USMT is Windows Easy Transfer for the enterprise and combined with MDT 2010 allows you to automate the backup, deployment, application/driver installation, and restore the users files and settings. You can even use this tool to migrate your servers from 32 bit to 64 bit!
There is a lot of documentation available, a series of videos and a whole day’s worth of sessions at TechDays 2009 that will cover this in depth. If you want to learn more you can still register for TechDays at http://www.techdays.ca