I strongly recommend you upgrade to Windows 7 rather than using the 64-bit version of Windows XP. Windows XP is very old and the 64-bit version of it has very poor hardware support compared to Windows 7. That means you'll have a hard time getting drivers for your printer, scanner, etc.
When you install Windows 7 you have a choice of installing it into the existing XP partition - it will rename the existing "Windows" folder to "Windows.Old" and create a new folder containing the new system. But if you can, I'd recommend buying a new drive and installing Windows 7 directly onto it, as that will (a) give you an easy way to revert to your XP system if anything goes wrong, and (b) give you a much cleaner installation on a disk that has no fragmentation.
When you install Windows 7, I recommend disconnecting everything except for the OS drive. The Windows 7 install likes to create a boot partition on another drive if it can find one, but most people prefer their system to boot from the OS drive directly.