I guess my first feeling is, if you have older hardware then I wouldn't consider upgrading from XP. Unless you absolutely need W7 then it is an expense and generally some hassle to upgrade; if I had to do it over again I would wait till I got a new machine that had W7 already installed. Now from Vista to 7 I would say go for it, minor issues; but from XP it was probably a 3 month learning curve for me. And I had issues getting my old trackball to work and many that pop in here for help have issues with old printers and old software or games.
But if you decide to go forward then, turn on all your devices, printers, joysticks, etc and Download, install, and run
W7 Upgrade Advisor. Then, unless it gives you a reason why not, you should go 64-bit. One reason right off the top of my head you might not go 64-bit is if you have under 2GB of RAM. Microsoft specs say 64-bit minimum RAM is 2GB & 3GB is recommended, 4 is better; 32-bit min is 1GB w/ 2GB recommended.
You might also read over this
64 vs 32-bit thread.
And you can also look up specific hardware & software for compatibility at the
W7 Compatibility Center.