People are mostly still using XP because they said Vista was a horror show, and the upgrade path from XP to 7 is either extremely difficult or impossible.
But there is no direct upgrade process at all from XP to 7. It's possible to go XP -> Vista -> 7, but no sane person would buy a copy of Vista just to do that. Here are Microsoft's official instructions for upgrading from XP to 7.
http://windows.microsoft.com/en-US/windows7/help/upgrading-f...
First you export all your files and settings from XP. Then you install Windows 7, which is actually a fresh OS install and not an upgrade. Then you reinstall your programs and import your files and settings back in.