I know that the best way is to do a clean install and then re-install your applications. However, I've seen a product that claims to let you upgrade without having to reinstall all your applications.
All I can say is "Don't do it!". There's a reason why doing a clean install is best, it works, it works reliably and you don't have to pay for a transfer program, none of which seem to work worth a damn.
I posted about my upgrade from 32 bit XP to 64 bit Win 7 right after the upgrade was released, using the Windows Easy Transfer Program and an external HDD. For the first time ever I was not only happy with a Windows upgrade, I was also impressed with how relatively easy it was and how well M$ documented the instructions and process. Yes, doing a clean install does take some time, but most of that is re-installing your old programs. And at the end you have a truly clean machine, no viruses, trojans or other malware. That's assuming you install good security software and scan your backed-up data files before re-installing them.