If XP is not marked "system" in Disk Management, you can just format the partition.
If XP is "system", then use EasyBCD latest build
BCD Install/Repair
Change Boot Drive
Point it to W7 when asked
(if the systems are on different HDDs, change the BIOS to boot from the W7 HDD)
Boot W7
Check that W7 is "system"
format XP when you're finished with it.