Acer 1 Disk Partition & Win 7 Hm Prem Install

Hello,
How do I partition the disk and install Windows Home Premium, replacing Win 7 Starter, on an Acer One Aspire (Model D250). E.g., do I replace the System Reserved partition (101 MB). I have made recovery disks and intend to retain the PQ Service partition. I have the Win 7 Home Premium upgrade disk.
Jim