upgrading OS from Windows Vista to Windows 7 - seeking advice

I am considering upgrading the OS in my Dell M1330-2 from Windows Vista Home to Windows 7 (PC specifications in signature), and I have several questions about the process:

1. Should I install a complete Windows 7 OS or is an upgrade version of Windows 7 as effective?

2. Are secondary units of Windows 7, such as those auctioned on eBay, ok to use provided they include the product key, or am I better off simply buying a new retail copy of Windows 7?

3. Is Windows 7 better than Vista for PC gaming (Ubisoft IL-2 Sturmovik)?

Thanks much for your attention and any responses.

 

I would do a clean install of Windows 7. The cheapest version I would purchase is the OEM system builders addition. If you want support from Microsoft than the upgrade version is what you should purchase. Purchasing a key from somebody on ebay or elsewhere is not a good idea in my opinion.

 

Thanks to Reb1 and especially Indrek for their fast and informative responses. [For some reason I had a brain cramp when posting my initial query and could not think of the term "clean install", which is obviously what I was asking about.] I am fascinated by the winsupersite article cited by Indrek that discusses performing a clean install of Windows 7 over Windows Vista using Windows 7 upgrade software. I had not thought a clean install of an OS was even possible using upgrade software--I had presumed an OS clean install was possible only with a complete OS disc. I'm intrigued and will certainly consider this technique for a clean install of Windows 7.

My current OS is Windows Vista Home Premium 32-bit. I didn't realize the product keys bundled with the secondary copies of Windows 7 and other OS auctioned on eBay were "black market" and prone to being blocked. Instead, I had assumed the secondary OS copies on eBay were legitimate and largely either used copies or new copies no longer needed, and that their product keys were original and part of the OS sets when new.

Thanks much again to Indrek for his detailed and interesting information. If I proceed with Windows 7 OS upgrade, which is likely, the article provided by Indrek provides a useful algorithm for a more economical clean install.