at the momment we have 2008 servers and xp clients. I am looking at moving to windows 7. I know with 7 you need to create a policy store and edit the polices from a 7 workstation. When you move to a policy store what happens with all of the old xp gpo I have created? When you click settings on one of the xp templates not all settings show as the adm files are not in the policy store.
Do I have to copy those adm as well or will the current xp gpo work as they are?
Firstly, ADM and ADMX files are completely unnecessary for policies to function. They exist to allow you to edit the policies. You could remove every ADM and ADMX file from your domain and the polcies would still work; you just wouldn't be able to edit most of the settings any more.
Addressing your specific question, ADMs in the PolicyStore do nothing, so there's no point in putting them there; only ADMX files are loaded centrally. If you do want to use them to edit existing policies, you load them into Group Policy Editor locally just as you do at the moment.