The problem here is that you can't upgrade directly from Xp to 7. You have to either remove XP and then install win 7, or upgrade to Vista and then further upgrade to win 7, which I don't think you want to.
And you'll only loose the data if you choose to format your drives, Othervise, should you be cool unless you keep all/most of the data on the same drive, where you have XP installed
Oh and there are alot of benefits. Rather you search it on google than I have to name them all, but I can mention a few.
More handy features, like picking a window and pull to the top/one of the sides of your desktop and they'll expand. I figured most of the features out myself and then learned them at a win 7 course.