I have used Windows Easy Transfer quite a few times recently to upgrade some of my machines to Windows 7. Here are some of the notes.
Use of external hard drive is recommended
Windows Easy Transfer supports different ways of transferring data. You can use an Easy Transfer cable to transfer data between the computers or just use the network. I do not have an Easy Transfer cable, but I have tried to use the network to do Easy Transfer several times. None of the attempts were successful. The use of network for Windows Easy Transfer is proven to be not reliable. I have used external hard drives with success. Besides, if you use it for upgrading a computer, external hard drive is your only choice.
When you use an external hard drive and you have a lot of data to transfer, make sure the hard drive is formatted as NTFS. The reason being only one file is generated, if you have FAT32 as the file system, there is a file size limit of 4GB. If you have more than 4GB of data to transfer, the process will fail. I ran into this problem several times, but the program only warns you that the disk space is not enough which is misleading. The true cause is the limitation of file size on FAT32 file system.
Not all data are transferred by default
Not all data are included by default, if you use Firefox or Thunderbird, the profiles are NOT transferred. There are also quite a few other things that are not included. You could follow this tutorial to select the stuff you want to transfer.
64 bit <-> 32 bit transfer is not supported
Transfer between 64 bit and 32 bit OS is not supported. I had 64 bit Windows 7 Ultimate Beta on my Ferrari 3400 and I decided to install 32 bit Windows 7 RTM later on. I found that after I installed the 32 bit Windows 7, I could not use the Easy Transfer data file prepared by 64 bit Windows 7.
Transfer between different languages is not supported
I didn’t have this problem but I found this out when I searched for the information regarding transfer between 64 bit and 32 bit. I thought it might be useful for someone else, so I listed it here.