Short: VERY easy.
You place the DVD in the DVD drive and boot the computer. Follow the onscreen prompts. Let the installer do it's job and you are done in probably less than 30 minutes.
Windows 7 ultimate runs perfectly on my old P4 2.4 GHz with 2Gb of RAM.
On a laptop, the disk drive may be a little tight, but that's all. Also, the usualy integrated video will slow you down. Add as much RAM as it can support.
Before proceeding with the upgrade, install and run Ccleaner to remove most junk and old files that tend to accumulate over time. You may uninstall it after that cleanup.
You may then want to copy the whole content to an external drive and format the laptop's drive.
When upgrading from Windows XP to 7, ALL the content of the original installation is stored in the windows.old folder. Next, the installer perforns a "clean" install: Install as if there was no previously installed OS.
Most Windows XP drivers should work for Windows 7. All Windows Vista drivers do work on 7.
Almost all 32 bits applications, including most made for Windows 95, will continue to work, maybe even beter than before.