HMC 6.2.1 is the minimum level for upgrading to HMC7.

The rootvg bookmarks area:  Rootvg Bookmarks  Downloads  Virtualization, LPAR, HMC (http://rootvg.net/index.php?option=com_bookmarks&Itemid=90&mode=0&catid=13&navstart=0&search=*) is a good place to start.

Follow the instructions provided on the web. Pay attention to, i.e. verify, firmware levels of your POWER systems before updating the HMC.

You can choose between doing an update, or just do a fresh (also known as recovery) install. If you make a copy of your critical console data before you start you can restore that as part of the recovery/install process. If you prefer an upgrade, find the special "Save Upgrade" command after you download the upgrades, but before you reboot to start eh upgrade process.

In any case, expect that the HMC will be unavailable for about an hour to two hours at a minimum. The managed system will continue to operate, but will not be managed - unless you have a second HMC!