Vista has a number of different versions available, and all have the option of buying a ‘Full’ license, or an ‘Upgrade’ license. You can save from $75 to $130 by getting the Upgrade license if you already own Windows 2000 Professional or Windows XP. The Full license allows you to install that copy on any one computer you like, whether it already had an OS or not. The Upgrade license requires you already have a Windows OS installed, and this is where the problem lies.

In the past, upgrade installations would prompt you for your media from a past version to confirm that it was legal. With a change in the way licensing and validation are done, Vista can’t know your copy of Windows is valid unless it’s already installed on the computer you are upgrading. This means you CANNOT do a clean install of Vista using an upgrade license, as confirmed in this Microsoft Knowledge Base article. What will add to the confusion for customers is that the label on the Upgrade License package says “Backup and clean install may be required”. Of course they are referring to backup and clean install of your current version of Windows, before you begin with the Vista upgrade.

What does this mean to you if you purchase an Upgrade license? If you want to install Vista on a new computer that you built, you’ll need to first install and validate your previous version of Windows before you can install Vista. If you have a Vista Upgrade license installed on any machine and you get a nasty virus and want to wipe everything out and start fresh, you’ll need to wipe it all and start fresh with your original Windows install first, then upgrade that to Vista.

Will you save money buying an Upgrade License? Yes. Is it worth it? For many people the answer is no, since it prohibits you from doing a Clean Install, and in my experience, that is the only method that should be used when installing an operating system. Upgrades leave behind little morsels that will come back to haunt you, and perhaps, they’ll come back to haunt Microsoft as well.