Microsoft has posted two videos that you can download. The first shows how to set up the beta 2 build of the Microsoft Deployment Toolkit. The second shows how to do a migration from XP to Windows 7.
Yes; that’s a migration. You cannot do an in-place upgrade. The migration uses a light-touch approach to capture the user state, replace the operating system and restore the user state. A prepared image can be deployed, containing all of the required applications. Your task sequence (that does the work) can be configured to perform other post-install steps.
If you want a zero touch approach then look at ConfigMgr with the latest service pack for Windows 7 support.