While I dont disagree with Mr. Draco. Yes it quite difficult to work with an upside down payment. It is what I am doing as well.
What you need to know is how much your car is worth in their eyes, how much your car is worth to the industry and how much private sellers can sell the car.
I am going to trade my 2008 Subaru off. I am upside down on it.
I have had it in trade-in negotiations before, what you need to make sure of is that the trade-in you are working with is a car the dealer can sell. I went to a high end dealer (porsche, maserati, ferrari) dealer about a month after getting the subaru. Now the subaru is a 30k car. but they were only offering 18k for the trade. That is one example, now I have this car going in for trade on my Camaro. To a chevy dealer the car is now 1yr old and is worth 20k to them (and to KBB apprently). But on the private market I can get 24k for the car.
So as that example it is all about the dealer you are going to work with.
Ok next thing you need to know is how much you can get financed. This depends on where you are. But for where I am (the northwest) Financing is dependant on the current market for the car. Such as I know many of the dealers around here have anywhere from 4k to 10k markups on the car. And since I am (you are too) 7k upside down on the car. You are basically dealing with a market adjusted rate or mark up.
The best thing to do is to have like Draco says, a good size down payment. I will have the Upside down as a down when i get around to actually getting the car.
The other thing to look at is the price of financing the car with the trade verse financing the car and keeping what you would have traded. I use an online calculator to work a lot of this financing information out.
http://www.edmunds.com/apps/calc/CalculatorController
use that calculator to try and figure some of these things out.