The Ultimate Windows 7 Upgrade FAQ

[Update 26-Oct: Now that Windows 7 has been officially released, I have answers to some specific questions about what you can and can't do with upgrade media. For details, see Finally, some answers to Windows 7 upgrade questions.
Written by Ed Bott, Senior Contributing Editor

[Update 26-Oct: Now that Windows 7 has been officially released, I have answers to some specific questions about what you can and can't do with upgrade media. For details, see Finally, some answers to Windows 7 upgrade questions.]

Almost exactly two years ago, I wrote about “Microsoft’s licensing mess.” Judging by my mailbag, nothing has changed in the meantime. Microsoft has done an exceptional job of designing Windows 7, but a terrible job of communicating how it will be sold. As Microsoft dribbles out details of the Windows 7 release schedule and product lineup, including pricing and upgrade offers, I’ve been deluged with questions from readers about whether they qualify for a Windows 7 upgrade and, if so, what’s the simplest, most cost-effective way to acquire it.

Before I dive into the Q&A section, it’s worth taking a second to clear up the source of much of the confusion I’m encountering. In the often bewildering world of Windows licensing, the word upgrade has two separate and distinct meanings. The first refers to the license that you purchase, which in turn allows you to run Windows on a specific PC. The second refers to a mode of setup, where you keep installed programs and personal data files while replacing the underlying operating system.

Confused? Let’s see if I can untangle things.

I’m currently running the Windows 7 Ultimate Release Candidate. What are my upgrade options?

From a licensing point of view, your installed copy of Windows is irrelevant. What matters is the sticker on the side of the PC. If you have a Certificate of Authenticity for Windows XP or Windows Vista on that computer (or a certificate of authenticity from a retail copy of Windows that has been assigned to that machine), you qualify for an upgrade license to any edition of Windows 7.

As for the installation itself, you are subject to the following technical limitations:

  • An upgrade installation is blocked on the RC build (7100). To perform an in-place upgrade, you must modify an installation file using the technique described here.
  • Because you are running Ultimate edition, your only option for an in-place upgrade is to install Windows 7 Ultimate edition.
  • You cannot change from Windows 7 x86 (32-bit) to x64 (64-bit) or vice versa. If you’ve been testing the 32-bit version and you want to go 64-bit, you’ll need to do a custom install.

I am currently running a licensed copy of Windows Vista Ultimate. Do I have to upgrade to Windows 7 Ultimate?

Again, there’s a two-part answer here. From a licensing point of view, you qualify for an upgrade license to any edition of Windows 7. As far as installing the upgrade, that’s another story. You can’t downgrade as part of an installation, so if you decide to move from Vista Ultimate to Windows 7 Home Premium or Professional, you’ll need to do a custom installation. You can upgrade from any lower version to the same edition or a higher one, with some exceptions. So if you're  running Vista Home Premium, you can perform an upgrade to Windows 7 Home Premium or Ultimate. [Update: Microsoft has published several documents purporting to describe how upgrades will work and has retracted at least one of them. Until the final code is released, it's impossible to confirm which versions are correct.]

Is it fair that I have to pay the same price to upgrade from Windows Vista Ultimate as someone running Windows XP Home or Vista Home Basic?

No, it’s not fair. But the alternative would be ludicrously complicated.

What’s the difference between an OEM license, an upgrade license, a full license, and a volume license?

Can I just explain the infield fly rule? That would be easier. Seriously.

No? OK, fine:

  • An OEM Windows license is one that’s included with a new computer. The top 20 manufacturers get insanely great discounts on Windows compared to retail costs. This license is locked to the computer on which it’s installed.
  • A System Builder OEM license has a much lower discount but is still a pretty good deal with a new PC from a small system builder.
  • An upgrade license is a discounted retail copy of Windows that can only be installed on a system that already has an OEM or full license.
  • A full license is sold at retail and is intended for use on a computer that was not sold with Windows originally. The price is horrendously high.
  • Volume licenses are sold in bulk to corporate customers, in quantities of five or more at a time. A volume license is available as an upgrade only.

You keep mentioning a “custom installation.” Is that the same as a clean install?

Not exactly. A custom installation allows you to install Windows on a freshly formatted partition, which is the definition of a clean install. But you can also use a custom installation to set up Windows on a drive that already has Windows installed on it, without wiping out the previous installation. Your old system and data files go in a folder called Windows.old.

I’m running the Windows 7 RC. But the pre-order upgrade offer from Microsoft says I have to be running a genuine copy of Windows XP or Windows Vista. So do I have to pay full price and buy a full license?

No. You qualify for upgrade pricing (assuming that the system originally included a licensed copy of Windows XP or Vista and has a Certificate of Authenticity) but are free to do a custom installation.

I am using Windows Vista Home Basic now. How can I upgrade to Windows 7 Home Basic?

You can’t. At least, not if you live in the United States, Western Europe, Japan, Australia, New Zealand, or the rest of the “developed world.” Beginning with Windows 7, Home Basic is available only in so-called emerging markets.

How do I do a clean install without wiping out all my data?

No one knows yet. Microsoft has apparently changed the upgrade rules for Windows 7. When I get a chance to test the upgrade media, you’ll be the first to know.

If you're confused about the differences between Windows 7 editions, be sure to check out From Starter to Ultimate: What's really in each Windows 7 Edition? and Do you need more than Windows 7 Home Premium?

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