Subject: Easy
Just register the new server in your environment. You will have to let it upgrade the design of your name and address book as part of the new server setup - that’s fine, it’s backwards compatible with your existing server.
Once you have the new server working, you can use the Administrator client to move the users over.
But really, why bother? Users will not see a difference just by you upgrading the server - their client would also have to be upgraded, and then their mail template design.
If I were you, I would just upgrade the server to Notes 8 and the upgrade the clients/mail templates as you have time and get the users trained.
By creating a second server you have to move users, ensure the moves work correctly and if you are doing Internet email on that server as well, you will have to change all of those settings around.
Since you have the luxury of a second box, I would install Domino 8 on your new hardware, but do not start domino just yet.
I would then shut down domino on my existing server. I would then file copy over (using Windows Explorer, command prompt - doesn’t matter) the Notes.ini and server ID from my existing server to the new one, the *.nsf from the root of the data directory from my old domino server to my new domino server and then any other folders from the data folder from my old domino server (like Mail) to the new domino server.
Once you are done copying everything over, unplug your old server from the network and in the OS of your new server change the servers host name and IP address to be the same as your old server. When you launch Domino for the first time, it should see the Notes.ini and assume the identity of the old server. It’s been a few years since I have done a server upgrade this way, and I may have missed a minor step or two but that’s the way I prefer to do it - with clean copies of all the .exe’s and .dll’s, as well as clean copies of the *.ntf’s. If you have any custom templates (.ntf’s) you would have to copy those over as well.
The nice thing is your existing server is still sitting there - if you have a problem you can roll back. You can move databases from the new Domino 8 server back to the old one if you have a problem as long as you don’t compact the databases and convert them to the new Domino 8 ODS (On Disk Store).
Sorry for the stream of consciousness post 
Feel free to ask more detailed questions - but Domino is one of the easiest (and safest!) applications to upgrade. It’s really forgiving, and unlike most other products you can roll back fairly easy (don’t try this with Exchange!)