Budget-conscious PC users contemplating a move to Microsoft's Windows 7 might be tempted to upgrade their existing machines, rather than spend money on new PCs that come with Windows 7 installed. With large swaths of the population avoiding Windows Vista, that means many would be making the upgrade on PCs now running the older Windows XP.

And those tech-savvy cheapskates would appear to be in luck. For a limited time (until July 11 in the U.S. and Canada) Microsoft is  offering reduced prices to people who pre-order upgrade versions of Windows 7 Home Premium ($49.99) and Windows 7 Professional ($99.99). The discounted upgrade prices are available not just to Windows Vista users but to people running Windows XP machines.

So it's a no-brainer, right? Well, maybe. There are a number of important issues to consider before making the jump to Windows 7 on an existing Windows XP machine. Here's what we've learned from questions we posed to Microsoft and independent PC experts.

First of all, the upgrade from Windows XP to Windows 7 requires a clean installation, which mean PC users must back up their data before installing Windows 7, then restore their data and reinstall their applications afterward. In contrast, in many situations, the shift from Windows Vista to Windows 7 can be done "in place," which preserves data, applications and settings.

[Earlier post: Microsoft's Windows 7 price cuts, upgrade promotions]

A clean install can be a pain in the butt, but think of it like a visit to the gym. The process is generally good for the computer, basically giving the machine a fresh start, said Jon Bach, president of custom computer maker Puget Systems Inc. in Auburn, Wash.

"Regardless of what’s required, I think it’s best practice to do a clean wipe," Bach said.

If you're comfortable with a clean installation, the next issue to consider is whether your Windows XP machine is up to the task of running Windows 7. As a baseline, Microsoft's minimum Windows 7 system requirements call for a 1 GHz or faster processor, with at least 1 GB of RAM, 16 GB of free hard-disk space and a modern graphics device (DirectX 9 graphics device with WDDM 1.0).

If technical stuff isn't your thing, there's another way to get a sense for whether your PC will run the new operating system smoothly. Microsoft offers an automated Windows 7 Upgrade Adviser program that can be downloaded and run on an existing Windows XP machine to figure out whether it's up to par for Windows 7.

One category of Windows XP users who might be fine making the upgrade are people who bought machines in 2007 or later but avoided Windows Vista in favor of the older operating system, said Ed Bott, a technology blogger and one of the authors of the upcoming book Windows 7 Inside Out. Some people opted against Vista on newer machines because of its negative reputation.

But if the hardware is older, it may pose problems.

For example, Bott said, people may have problems running Windows 7 on older notebook computers, purchased in 2006 and before, that use integrated graphics, which share the main system memory rather than having dedicated memory of their own. Newer machines with integrated graphics should be fine, but one big red flag is Intel's older 915 chipset, which doesn't support the fancy Windows Aero interface. (A fact that led to a consumer lawsuit against Microsoft over Windows Vista, but that's another story entirely.)

Another big consideration is whether Windows 7 will run existing applications and devices. Microsoft will be offering a free add-on program for Windows 7, called Windows XP Mode, that works with virtualization technologies to help with compatibility problems. However, it's expected to be offered for use with Windows 7 Professional, Ultimate and Enterprise, not Home Premium.

To get a sense of whether your devices and applications will run natively in Windows 7, one trick is to check Microsoft's Windows Vista Compatibility Center. The similar compatibility site for Windows 7 isn't yet available, but the company says it's working to ensure application and device compatibility between Windows Vista and Windows 7, so the Vista site is worth a look for now.

In addition, the aforementioned Windows 7 Upgrade Adviser, available now in preliminary form, will help assess the compatibility of existing devices and programs with the new operating system.

I've been using Windows Vista and testing Windows 7, but I ran the Upgrade Adviser this morning on an older ThinkPad notebook, running Windows XP, and it worked well. Among other things, the Upgrade Adviser told me that I'll need to run Windows Update after installing Windows 7 to make the ThinkPad's fingerprint-reading technology and my older HP printer work smoothly with the new operating system.

The processor speed, memory and graphics on the older ThinkPad were all up to snuff for Windows 7, according to the program, but I'll need to free up more space on my hard disk before upgrading.

Of course, the way many people will get Windows 7 is not by upgrading but by purchasing a new computer.

"If there was anything marginal about my hardware, if there was anything there that had been nagging me, I’d replace it," Bott said.

But as inexpensive as computers have become, that's still a bigger purchase, particularly when factoring in the limited-time pre-sale upgrade discounts Microsoft is offering on Windows 7 Home Premium and Professional. If you're determined to make the move to the new Windows version, it's at least worth exploring the possibility of an upgrade, even on an existing Windows XP machine.