How do I prepare Windows 7 for a graphics card update?

There shouldn't be a problem upgrading from one Radeon card to another, but to be 100% sure you can uninstall the existing Radeon drivers from your system before removing the old card.

Windows will try to reinstall but just say "no" when you reboot still with old card installed.

This will downgrade your graphics to the basic VGA/SVGA drivers, but that's a good thing.

Then power off, remove the old card, install the new card and reboot.

Windows should detect the card correctly and install the correct drivers - or ask you to use the supplied installation disk.

The biggest problem with older versions of Windows was that unless you uninstalled the drivers first you were left with control panel applets on your system for the wrong graphics card which meant that the display properties control panel wouldn't work.

I would just do a backup, download the latest WHQL drivers for your card and swap it out. After hardware detection install latest drivers and you are done. Over time this process has gotten much better and combination of Win7 and newer drivers is pretty sturdy.