As far as reinstalling WD make sure you follow the Moving WD to a New Computer FAQ.
As far as how everything will work, I can’t comment on WD as I haven’t taken that plunge yet, I have upgraded two machines to Win 7 and other than a couple of old applications that are not supported I didn’t have that much of a problem. On the Printer side I did have to get a new printer as at the time (maybe still) the Konica Minolta Printer i had did not have Win 7 support…