Yes I custom 'upgraded' XP desktop to W7 Home when I got a new W7 laptop, so I would not be maintaining and networking two OSes.
'Custom' is clean install, and all your files kept in windows.old
If you don't enter license key, you have 30 days to decide if you want to keep it.
Might be a hassle to revert to XP even with windows.old unless you can make a System Image first.
Or buy a family licence for upto 3 PCs?