Without reading through everyone elses responses (to avoid bias), I'll give you mine. The K20d and K7 are two completely different cameras. Forget about video in my consideration here, I barely ever used it.
The body is smaller than the K20 so I found myself wanting the battery grip for the K7. With that, it was perfect for me. Well balanced with most lenses and with the camera body grip redesigned, very easy to hold and use.
I found that while results could get grainy (I say grainy because I didn't experience much actual color noise) at times, it was rare I couldn't use a photo because of too much noise.
The larger rear screen was great but at first, I didn't care for the new button layout. I didn't like the locking mode dial either (the one on the K5 is larger which makes it easier for me to use).
The K7 gives you a dedicated ISO button that is nice to have and if you're a green mode shooter, you don't have to hunt around for it. It's right there on the back.
I Did notice that the AF was faster and seemed more reliable. For example, I got my first ever bird in flight photo with it using the same lenses I had attempted it with on the K20d. AF tracking left something to be desired, which seems to be a (improving) issue with the Pentax DSLRs.
There are pros and cons to every camera. My whole point here, is once you learn to wrangle the K7, it will serve you quite well. I'm a tech chaser of sorts otherwise, I would probably still have My K7. Someone else here at PF is enjoying it now.
http://www.flickr.com/photos/rolleiman2007/sets/72157622781481730/