Well, now I work on a laptop with Windows XP. Due to interest in Azure development I'm thinking of migrating to Windows 7. Yes, I know I can install something on a VM but that's not always comfortable.

How is it better to migrate?

1. Upgrade XP to Vista, then upgrade
Vista to Windows 7
2. Clean install Windows 7

And which edition is preferred - 32 or 64 bit?

Or possibly you would advise to use Windows 2008 R2? I'm using it only for development and listening music, very rarely films(not HD)?