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Upgrading to Windows 7 is normally a painless process, but if you want a bit more granular control over the process you might like Paragon's System Upgrade Utilities 2010 ($30, buy-only). The package leverages the company's imaging, partitioning, and boot manager software in a way that allows you to backup your old system, create a separate partition for the OS if you so desire, and run both your old OS and the new Windows 7 from the same drive.
Alas, the handholding that Paragon System Upgrade Utilities offers isn't nearly as thorough as I'd hoped. The Initial Backup imaging was a no-brainer, but the Install OS partitioning section didn't seem to realize that even a minimal Windows 7 installation requires several gigabytes: It let me create a new partition with only 1.8GB. Of course Windows 7 balked at installing there. This happened when I was using a minimal 8GB virtual machine partition; the program came up with more reasonable sizes when used with larger disks, but it does illustrate just how much help you can expect.
All the components of the System Upgrade Utilities 2010 worked perfectly for me. Two of the more useful features are the ability to convert a Paragon image to the .vhd format (which you can mount or run under Windows 7 natively), and the boot manager (which allows you to boot to both your old operating system and Windows 7). Microsoft does provide a free downloadable utility--Disk2vhd--that can copy a partition to .vhd. If you install Window 7 to partition other than the one your current OS resides on, Disk2vhd creates a dual-boot menu for you automatically. Paragon's versions, however, are a bit slicker.
In the end, System Upgrade Utilities is a nice little package that you probably don't need. I'd recommend spending $20 or so more for one of the full-featured suites from Paragon, Acronis, etc. Actually, Paragon told me they will upgrade you to the full Hard Disk Manager 2009 suite for said $20, so you could buy SUU 2010 and upgrade later. This deal is not advertised, but the company assures us that it can be done by contacting customer service.
Note: The "Download" button at the program's page downloads the manual only; to buy the program, you'll have to visit the vendor's store. Once you have the program, you need to add the free Adaptive Restore add-on for HDM 2009 to convert to .vhd.
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