Dell Optiplex GX620 & Windows 7 Compatibility?

I have a Dell Optiplex GX620 and I'm still running Windows XP. I would like to upgrade my operating system to Windows 7. Will this PC run Windows 7 OS? My Dell PC has two hard drive bays; can I simply pick up a generic SATA hard drive on Amazon, along with a copy of Windows 7 Home Premium? Then connect the hard drive and install the new OS disk...? Do I have this right? Will this work? Or should I just ditch this old tower PC and shop for a brand new PC or laptop?