A 7 & 6 are compatible, a 7 & 8 are NOT!, an 8 & 9 are, but will suffer slightly in precision.

Other things to remember. Quality 7-speed items are difficult to find, you'll be restricted to lower level components unless you can find some N.O.S. items on E-Bay!

If you decide to jump up to 8 or even 9 speed, you will need to replace the freehub and change the dish of your rear wheel. BUT, with close-out prices available, it may be worth the additional hassle!

It all depends on how much $$$$ do you want to spend on upgrading. For the cost of improving an older 6 speed, you could probably get a complete bike with 9 speed, vee-brakes, suspension forks, new wheels...etc. I've seen people spend good money ($150-250) to upgrade an old bike only to still have an old bike! A brand new entry-level bike is as little as $300, and will have a much better frame and components.

L8R