Yeah, expect to have to do a full reinstall. You can probably get away with installing directly over your old Windows install, just back up your important data, especially anything saved in the My Documents folders. It's not particularly hard, though, only takes maybe 30 mins on mine w/ XP.
Do you have a prebuilt rig (ie-one bought from Dell/HP/Gateway/etc)? If so, the Windows disk they gave you is gimped, with some of the critical files stored permanently on the mobo that came with the rig, and not present on your disk. If that's the case, you're going to need a new copy.
If you've got a full copy of Windows ready to go, do yourself a favor and download nLite, then pop over to the RyanVM site. Use nLite to make a shiny new Windows install disk that has all the Windows updates (that you downloaded from RyanVM) folded into it. You're also going to need the Ryan Integrator for this.