There was a thread on this very subject not long ago....
I did a Vista to W7 upgrade, backed up all my important stuff first to an external HDD.
Upgrade went very smoothly indeed over about an hour and a half and nothing was lost, including settings, favourites etc.
EDIT:
And here's the link to the previous thread
http://www.pprune.org/computer-inter...s-7-vista.html