I moved this to the all things root sub forum where you will get the best answers. Generally, if you have only rooted and haven't modified anything (bootloader, kernel, rom, etc) they the OTA should work, but will break root. You can use a root keeper app, though these don't always work. Another option is to simple reroot the device again after the update. Both of these options allow you to keep your apps an settings. Another option is to sideload the update. You can usually find prerooted versions for download. The downside here is that you will need to reinstall everything or restore from a backup like TiBu.
Anyway, good luck with the N7.