you wont loose your files.
What's your PC specs? Many XP machines dont have enough ram to support W7. (1gb MINIMUM, 4gb reccomended.)
W7 is an improvement over Vista. W8 is terrible.
XP is amazing, but many things lack compatibility with it nowadays :/
So unless you're having issues with compatibility, i wouldnt upgrade. or should i say.. "downgrade" xD