I agree there is little point installing 32 bit windows if you are going to buy a new copy of Win 7. If you are like me and have many programs that are XP oriented then why not consider doing a dual boot with XP and Win 7 both on the same drive like I have, although my copy of Win 7 is only 32 bit.
If you do want to dual boot then you do need to partition your hard drive first, so you need a decent sized drive to start with.
Provided your CPU is 64 bit compatible - you can find out here:
http://windows.microsoft.com/en-us/wind ... de-advisor then I am sure you won't regret going 64 bit Win 7.
Of course if you don't need XP at all then you can go for the Win 7 upgrade disk and save yourself about £40 but if you want to consider dual booting then you will need the full (clean install) disk not the upgrade one.
Win 7 can run a lot of older programs in compatibility mode but there are exceptions even with programs released by Microsoft. When I went Win 7 I lost access to a lot of my older games that I like and this is why I chose to dual boot so I can still use them when I want to. Microsoft have promised support for XP (SP3) until April 8th 2014.
The creation of the dual booting process is fairly simple, especially if your hard drive is already suitably partitioned into 2 or more appropriately sized useable areas. You must however, either already have Win XP installed, or if you are upgrading your hard-drive as well, then you must install Win XP before installing Win 7. If this appeals to you and you want more detail about how easy it is then PM me.