Windows 7 comes with a pretty good migration tool--certainly better than the XP or Vista versions--but it's not perfect. I won't give you step-by-step instructions (it's very intuitive and you don't need them), but I'll help you through the major decisions and pitfalls.
But first, you must make your hidden files and folders visible on the old PC (I'll tell you why in a little while). Open Windows Explorer and, if you're using XP, select Tools, then Folder Options. If you're using Vista, select Organize, then Folder and search options. In either OS, click the View tab, select Show hidden files and folders (or Show hidden files, folders, and drives), and click OK.
Now you're ready to get started.
On the new PC, select Start, All Programs, Accessories, System Tools, and Windows Easy Transfer. Or you can simply select Start, type easy transfer, then press ENTER to launch the program.
The program will ask how you want to transfer items, and offer three options. Here's what you need to know about them:
Network: This is by far the easiest option, provided you've got both computers on a network and that they're able to access each other. If not, forget it.
Easy Transfer cable: Several companies make USB cables specifically for Windows Easy Transfer. I tried StarTech.com's USB 2.0 Data File Transfer Cable for Windows, and despite packaging that referred only to the Vista version, it worked just fine with Window 7. I assume other companies' cables will, too. The main problem: You have to buy one. I've seen them on sale for about $10.
External hard drive or flash drive: This sneakernet solution is the slowest option, because you have to copy everything twice. But if you don't have a network, don't want to buy a cable, and have an external hard drive handy with plenty of free space (forget the flash drive; it won't be big enough), it's still pretty simple.
When you get passed this decision, the version of Easy Transfer running on your new PC will help you get another instance of it up on the old one. Then it will scan the old PC and decide what needs transferring.
And that's where the program doesn't quite work as it should. It selects all the obvious files and folders (documents, music, and so on) for copying, but it misses almost everything in the appdata folders. Here's what to do:
After scanning your old PC for files to transfer, the program will ask you to "Choose what to transfer." For each user listed, click Customize. Everything in the resulting pop-up menu will be checked, but not everything that should be checked is in that pop-up. So click Advanced.
You'll need to check a folder or two in the resulting dialog box. If your old PC is running XP, check the two Application Data folders; the second one is inside the Local Settings folder. If you're graduating from Vista, you only need to check one: AppData. (This, by the way, is why you need to make your hidden files and folders visible. If you didn't, these folders wouldn't be listed for you to check.)
Click Save and continue with the wizard. When the transfer is done, the program will give you a list of the files transferred, and another of the programs installed on the old machine but not on the new one. You'll want to install at least some of these programs. You can return to these lists by launching the program Windows Easy Transfer Reports.