HELPROOM ANSWER Upgrading the older laptop to Windows 7 is definitely the way to go, as it will improve performance and extend the machine’s useful life. First check whether the laptop can be upgraded using the Windows 7 Upgrade Advisor. For more on this read: How to get your PC ready for Windows 7.
If you perform a full upgrade using a Windows 7 upgrade install then your files and folders will be retained. However, you may find that some software will no longer work, and may not even be transferred to the new installation because of compatibility issues.

For peace of mind, you could instead purchase a full version of Windows 7 Home Premium and install it from scratch. This will ensure the correct drivers and components are installed first time round. Either way, we’d recommend backing up all your files and programs before you make the upgrade.

The Upgrade edition of Windows 7 Home Premium costs around £90, while the full version is around £140. Both are available from the PC Advisor Software Store.