Transferring data from old comp. to new comp using external backup drive

Im a few years removed from all of this technical stuff. So what I thought would be simple is kicking my butt. I bought a new computer and am trying to get my files from my old computer to the new one. I have an external drive wd3200. Old system was XP, new system is windows 7. New computer wants to format external drive and won’t let me open it to transfer files. Any solutions to this problem? Or am I going to pay an arm and a leg for a tecky in some store to transfer my files to the new computer? I just want my songs, pictures and documents on both computers. Is it possible? And is there an easier way besides using the external drive? I’ve tried using a direct USB cable but neither computer will recognize the other one.

Any ideas?

Try burning a Linux Live CD and boot from that and see if it recognizes the drive.