Eric Ligman of Microsoft is sending a message this week to bloggers that although it is technically possible to install a full version of Windows 7 using a Windows 7 upgrade version, it does not mean that it is legal.
“For those of you without an existing Windows license to upgrade from, you should be aware that an upgrade license by itself is not a license to install and run Windows on your computer,” he wrote in a blog post.
“In order to upgrade, you need to have a qualifying license to upgrade from. Again, that’s why it is called an ‘upgrade,’” he added.
Source: Channel Web

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Lee
Yet, it’s not actually possible to upgrade directly from XP without doing a full install. Make up your minds, people.
Jeremy, there is a little known operating systems called… Vista.
Come on man ! I can see at least 5 computers from
my desk all with legitimate copies of some version of Windows, Win 98SE to Vista Home Prem SP2.
Hell, I can go down to the local thrift shop and buy a broken unit for $5US with a valid Microsoft product key sticker !