VMware Fusion question: How best to move from XP to Windows 7?

[gabester]

If you have the disk space and don't have any snapshots of your VM, make a backup copy of the VM disk image file and then try upgrading that (when you have a spare hour or two at a time to be without a functional VM.)

Although if you don't need the XP data doing a clean install would definitely be recommended.
g=