windows 7 new install from usb drive

i run XP Professional on my laptop and XP Home on my desktop. i did not want to change to Vista with all its problems. but now i hear that support for XP is going to be stopped. therefore i am looking at getting windows 7.
have heard lots of good things about it.

being a novice with this stuff...what steps do i take to install windows 7?
of course i will back up all my data and programs....

do i uninstall windows xp?   or can i just put windows 7 disc in and away i go?
will the install of windows ask all sorts of questions about my ram, memory, graphics card, video card etc many of which i cannot exactly say. i don't want to get in the middle of the install and realize i cannot continue because i don't have the answers to their prompts.

i want to try to do this on my own and not pay $$$ for a computer tech to do it.

hope someone can help me with some very basic steps to follow and also things to be aware of and watch out for.

thanks.

ps...i have read that one can load  windows7 to a usb drive (compressing files using WRAR trial version) and run it from there. that would be very nice so i could try it out before actually making all the changes. any comments?