That's what I'd
prefer to do, personally.
(More specifically, if it's a working machine that I don't want to mess too much with the installed programs and settings I can't imagine why I'd want to go and change the OS. If I want to put a new OS on something then there are
very few circumstances why I'd want to migrate from the old and carry all the stuff up that's used to the old system.)
However, that does not always apply to 'commissions' on behalf of other people, ultimately, if they won't be advised against asking me to do this for them. And (very recently) I've had to deal with a PC that had been 'upgraded' from XP to Windows 7, had totally gone wrong.
At first the owners said that it had been done by a store that provides this kind of service, as part of an "optimisation and speed-up" process. Which, given the reputation of the store, wasn't something we disbelieved. But after it became clear that it was horribly broken in several ways for which the best solution would be a re-installation, they let slip that it was a "friendly neighbourhood guy with a disc" who had 'helped' them. Which meant that they didn't have a valid license at hand, so a reinstall of Seven was out of the question (without shelling out even more).
Other arrangements (legal ones) were then made.
The machine would have been perfectly happy with XP still on it (or, if it ever had severe enough problems, the legal XP reinstalled and set back up as wanted), and the owners had no real immediate need for Windows 7 even if it had worked. By the time they need to do this (and, conceivably that could be quite some time, given what they use the machine for), a new machine (newer and yet cheaper than anything currently available) would probably be best for them, but that can wait and be planned for.
There's all sorts of approaches, according to what your personal circumstances (and capabilities and resources) are. I can't say any particular was is
the way to do it, but (OTOH) there are wrong (or at least wrong
er) ways to do it.