Moving from XP to Windows 7

There are various tools, includings, Microsoft's, for migrating from an old computer to a new one.Given the considerable differences in file structure between XP and 7, how will 7 go about deciding on file location? Will it, for instance, select all of a given user's Word docs from the existing folder and glom them all together, in that user's new Documents? It's not clear to me how the linking to other folders works.