I just upgraded from 6.5 to 7.0 by retaining my data in the home directory as can be done and using the same default user and password, while choosing use the old user data.
Installation went pretty smoothly. Overall, this version seems a little more solid in how it runs with less erratic behavior. The live 7.0 CD can read and write NTFS files as should be expected.
Some of the settings are set back to default in appearance and you have to reinstall many applications such as kaffeine, VLC and so on. Mplayer seems to behave itself a little more, but is still quirky.
All of my Firefox plugins and favorites were retained. As always, if you can't play a file's format, go to http://www.media-convert.com
Mplayer and VLC can be made to play flash video, but it may be easier to use the Firefox add-on Downloadhelper to download the video and then use the media-convert to change it to Linux DivX + AVI.
Youtube and so on works properly. Overall, aside from better looks and more solid performance, Mepis 7.0 can be considered more of a refinement or evolution of Mepis rather then a whole new animal.