Your questions have acutely come up before so in the future, I do recommend doing a search.
[Jason Jack] “1) The steps in uninstalling Final Cut 6 and Installing Final Cut 7”
Well with Pro apps is actually best to erase the entire system drive and start fresh when moving to new version. This will insure that everything is good. There is a 3rd party app called FCP Remover that will remove FCP but again is is best to clone your system drive and then erase it and start fresh.
[Jason Jack] “2) Once installing Final Cut 7, will I be able to open the project file that I am still working on with Final Cut 6 on Final Cut 7?”
Yes but once saved you will no longer be able to open it in FCP 6 again. It is not usually recommended to upgrade mid project, but once you have finished one and before you start another.
[Jason Jack] “3) What will happen to all my plugins?”
Depends on the plugins. You need to check with the maker of the plugin to see if they are compatible with newer versions of FCP.
**Hindsight is always 1080p**