Btw, its a good idea to do a clean install of win7 64, specially when you are coming from a 32bit environment. It can cause all sorts of problems.
Also, you can continuously do upgrades to your computer without hassle even if you use a win7 oem copy. And besides, if it took you this long to upgrade from XP to win7, it really doesn't seem like you upgrade too much on a regular basis.... hehe
Even then, if the key gets tagged by windows as being invalid from too much upgrade, you can always do a phone registration that takes literally 5 mins to do. It just re-evaluates the key and gives you the green light.
One more thing, if you do use win7 upgrade and use the xp key, you will loose your xp key forever. Even then, you can install win7 without consuming your xp key, but it does require more steps and a fresh install; which is still recommended.
I am going to install a new hard drive in the process of upgrading my system. Should I first put the new HD in, transfer all the drive information to the new HD, then do the Win7 install or do something different?
It depends on which drive is faster. Post your specs of the drives. If your new drive is faster, then just do a clean install of win7 on that. You can do this with the upgrade by installing win7 twice; it will just detect a previous windows was installed and install again without needing your xp key. If your old drive is faster, then plug in your 2nd drive, partition it, format it and transfer your files; then format the original drive and do a clean install.