As October nears and Windows 7 hits the retail shelves, most computer owners with Windows XP will face a daunting decision: Should they upgrade to the latest and greatest operating system from Microsoft, or save their money?

Because of the vast differences between XP and Windows 7, current XP users will face the daunting task of a "custom install" of Windows 7, which is Microsoft-speak for wiping your computer and starting over.

The odds of most XP machines being happy with the power requirements of Windows 7 are pretty slim, so you may be better off putting the retail purchase price of Windows 7 toward the price of a new computer, which will come with the new operating system pre-installed. If you have a current Windows machine that you installed XP on, you may be OK, but make sure it is capable of handling two or four gigs of RAM.

If your PC is running Windows Vista, you should have a pretty clear upgrade path to Windows 7, but you will want to increase the computer's memory to as much as you can reasonably afford. Remember, if you pick the 32-bit version of Windows 7, your machine is limited to 4 gigs of physical RAM. If your motherboard can handle more, you'll want the 64-bit version.

If you are happy with Windows XP or Vista, you need to ask yourself if the expected $125 to $200 upgrade price is worth it. Windows 7's feature set is better than both operating systems, but its cost is not insignificant.

The best performance will come from computers with separate video cards — those with video memory separate from the motherboard. If you have a desktop computer, you may want to spend a little money and add a video card to the motherboard video.

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One last aspect is the hard drive. If you are doing a fresh install, consider doing a whole install on a new hard drive. If you get a 7200 RPM hard drive (the spindle speed), you will see a pretty good improvement over the standard 5400 RPM drive and you won't risk losing your data. Instead, you shut down your PC, unplug your old drive, plug in the new one and install the operating system and the new drivers.

Then plug in the old drive as your second drive and copy — don't move — needed files back to the main drive (usually documents, favorites and pictures.) That way, you have a backup drive. You can copy any future documents and pictures to the old drive, which then becomes a handy backup drive.

You will also have to install your applications, like Office and your printer software. So make sure you have those discs handy or the ability to download them before you start. Do keep in mind that some applications or printers won't be ready for Windows 7 right away or ever, so don't be surprised.

James Derk owns CyberDads, a computer repair firm and a tech columnist for Scripps Howard News Service. E-mail him at jim@cyberdads.com.

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