See
http://en.wikipedia.org/wiki/Windows_7_versions
"There is no direct way to upgrade from XP. "
I think you need to ask yourself why you want to put a new OS on your
existing machine. Is it so that you can run new software? Doesn't sound
like it. The main advantage of W7 over XP is that it's much more secure.
If your existing software serves your needs, I'd keep XP, and install W7
on a separate partition (or even a new hard drive, they're cheap these
days). Use W7 for the internet, and disconnect the XP side of the
machine from the web (except maybe for updates:
http://support.microsoft.com/kb/322389). This way you can migrate from
XP to W7 gradually, as updated versions of your software become available.
A 64-bit OS can run 32-bit programs, but not vice versa. I use W7 Pro
64-bit, and I haven't had a problem yet. AIUI, the only downside of
doing this is wasted data-width, because the OS fetches 32-bit
instructions but uses 64-bit wide data path.