SearchExchange tells it like it is....

Because of major Exchange Server architecture changes, moving from Exchange 200e to Exchange 2007 is going to be as dramatic and complex as upgrading from Exchange 5.5 to Exchange 2000. ...

The bottom line is that, unless Microsoft has something in the works that I don't yet know about, upgrades from Exchange 2003 to Exchange 2007 are going to be impossible. You are going to need at least one new 64-bit server so that you can install Exchange 2007 on it, and then perform an Exchange 2003 to Exchange 2007 migration.
How many times will Exchange customers let their vendor abuse them with rip-and-replace upgrades?

Link: SearchExchange: Preparing for Exchange Server 2007 > (thanks, Sean)

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