The good news first, its cheaper than the previous versions of Windows and you can update from Windows XP to Win 7 without having to buy a full retail version. Computers running a version of Windows that predates Windows XP will have to purchase a full version of Windows 7. All other versions will be eligible for Microsoft's rebated 'upgrade' prices.

Windows 7 Pricing
• Windows 7 Home Premium: $120 [INR 5760] for upgrade; $200 [INR 9600] for full version
• Windows 7 Professional: $200 [INR 9600] for upgrade; $300 [INR 14,400] for full version
• Windows 7 Ultimate: $220 [INR 10560] for upgrade; $320 [INR 15360] for full version

Vista users will be able to upgrade 'in-place' to a corresponding or higher version of Win 7. For example Vista “Home Basic” and “Home Premium” users will be able to upgrade to Win 7 “Home premium” or “Ultimate”. Moving down a tier, or upgrade from Windows XP will however require a 'Custom Install'.

An 'in-place' upgrade will install Win7 over the current windows install without having to delete user data and installed software, while a 'Custom Install' is basically a format and clean install of windows.

A cropped version of Microsoft's official upgrade chart.

Basically it boils down to choosing between Home Premium, Business or Ultimate. For most home users, home premium should make sense. The additional features that Business offers over Home are Windows XP Mode, Domain Join and Network Backup. Ultimate adds 'Bitlocker' and support for 35 languages to the mix.
Microsoft's feature-list can be found here:Compare Win 7 editions.

Windows 7 does run on netbooks. However, your milage may vary. Netbook users really might want to wait for the netbook specific build or choose from a flavor of Linux (perhaps?).

Links:

• Windows 7: http://bit.ly/CPZn
• Upgrading from the RC: http://bit.ly/2q8LzF
• Linux for netbooks: http://bit.ly/3pRcZA