Your question implies that your server is used by a number of people, but all authentication is done locally, which sounds odd to me.
If you are actually maintaining several systems with identical accounts, you might want to consider using NIS for authentication, in which case moving the accounts just means setting the new box up as an NIS client.
If you are committed to moving the user accounts as you have described, I suggest that (after you do a backup) you turn off password shadowing, copy the user entries in /etc/passwd and /etc/groups to the new box, then turn shadowing back on.
Note that the /etc/skel (default user environment configuration) files will have changed between RH7.2 and RH 9.0, so your users will be missing out on some of the features the upgrade will provide new users. If your users are curmudgeons that carry around their own highly customized environment, then this won't matter.
If you only have a dozen users, I would be inclined to suggest that you just copy over the /etc/groups file, use useradd to create their accounts anew on the new box with their old uids and gids, leave the old box up for a few months as an NFS server - letting your users copy over the files that they want. Then shut the old box down, holding onto your backup.
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