Sorry to break it to you, but upgrading to Windows 7 from XP is impossible, unless you upgrade to vista and then 7. But really the best thing to do when it comes to Windows is do a clean install, backup the documents and what not you want to keep and then just go for it, format the partition of the drive you have and install Windows 7.
THIS IS REALLY IMPORTANT
HOWEVER, because you only have the RC you will NOT be able to upgrade it to a full version of Windows 7 when it is released. So the best thing to do in my opinion is to wait until you can get the full version of 7 so to avoid having to do 2 clean installs.
Technically there is a way to upgrade from the RC to the full version but it doesnt always work, so the risk is really up to you, but I say its really not that good of an idea.