PDAs are very different from desktop computers, particularly in how you install or upgrade their software. Because they have limited memory, it isn't practical to upgrade on top of anexisting version the way we've grown accustomed to on the desktop. In fact, you'll need to get rid of the first version before the bigger, better version takes its place.
Earlier versions of FileMaker Mobile will not communicate with FileMaker 7 databases, so you should make sure that you have uploaded any discrepancies between your handheld database and your main FileMaker file before you upgrade the file to its .fp7 version.