If you want to install the Windows 7 RC candidate and not lose all your customizations then follow one of the two methods described below:

Method 1:

1. 1. 1. 1. 1. Download the ISO as you did previously and burn the ISO to a DVD.
            2. Copy the whole image to a storage location you wish to run the upgrade from (a bootable flash drive or a directory on any partition on the machine running the pre-release build).
            3. Browse to the sources directory.
            4. Open the file cversion.ini in a text editor like Notepad.
            5. Modify the MinClient build number to a value lower than the down-level build. For example, change 7100 to 7000.
            6. Save the file in place with the same name.
            7. Run setup like you would normally from this modified copy of the image and the version check will be bypassed.

Method 2: The official way of updating Windows 7 Beta to Windows 7 RC is the following:

1. 1. 1. Starting with a data backup. This includes documents, multimedia files and any other data or files that got created by the user and need to be transferred to the new system. We would suggest to either copy the whole Windows 7 partition to a spare drive or be very careful when creating the backup.
      2. Using Windows 7 Easy Transfer to backup Windows 7 settings. Windows 7 Easy Transfer is part of Windows 7.
      3. Formatting the partition Windows 7 Beta was on.
      4. Installing Windows 7 release candidate.
      5. Using Windows 7 Easy Transfer to restore the settings of Windows 7 Beta.
      6. Reinstalling any third party applications that are needed on the computer system.
      7. Restoring data from the previously created backup to the computer system.

That is a long process which can take hours or more depending on the data and third party applications that need to be reinstalled. The release candidate will block the direct update from Windows 7 Beta to it.

Table indicates that, Windows XP to Windows 7 upgrade is not supported. It also indicates that Windows 7 RC to Windows 7 RTM in-place upgrade is supported.

Download the Windows 7 Upgrade Test Matrix Chart

Microsoft’s decision to remove Internet Explorer from Windows 7 in Europe means users will no longer be able to upgrade in place.

Until now, Windows Vista users have been able to upgrade to Windows 7 and retain their existing applications and data.

However, Microsoft says that anyone installing the new “E” versions of Windows 7 will have to start from scratch.

“The E versions will require a clean install,” a spokesman for Microsoft Europe told PC Pro. “They will need to rebuild their default settings after installation.”

The decision will cause great inconvenience to Vista owners, who will now have to reinstall all their software and re-copy documents, photos and other files back to their PC post-installation. XP users didn’t have the option of an in-place upgrade in the first place.

Although Internet Explorer 8 will be “removed” from the operating system itself, Microsoft will still effectively be bundling the browser with retail versions of the OS. The company will provide an IE8 CD-ROM with all copies of Windows 7, while PC manufacturers will be offered the browser for free to bundle with new PCs.