What's the real story with Vista upgrades?

A story by Ken Fisher on Ars Technica this morning is raising alarm flags. Fisher points to Microsoft Knowledge Base article 930985, which documents a change in the setup process for upgrade versions of Windows Vista. The article's title reads: "You cannot use an upgrade key to perform a clean installation of Windows Vista."

Fisher concludes, "[Once] again, Microsoft appears to have made licensing decisions without considering how people actually use their products."

George Ou calls it "another one of those 'what were you thinking' moments for Microsoft management."

I'm not certain what's actually going on here. The KB article itself is ambiguous. In Microsoft's world, a clean install requires booting from optical media (CD or DVD). Here's Microsoft's definition of a clean installation, as contained in an earlier KB article:

A clean installation refers to removing all data from your hard disk by repartitioning and reformatting your hard disk and reinstalling the operating system and programs to an empty (clean) hard disk.

So how is the upgrade media going to work? It sounds like it won't be bootable, which means that you won't be able to start your PC using the upgrade DVD. Will it include the disk management tools included on a retail Vista DVD? Will you be able to install Vista without a product key, as you can with a retail DVD? Will you be able to install Vista to its own directory or to an existing disk partition without migrating current settings - what most people outside Redmond consider a "clean install"?

The answer to all those questions, at this point, is "Nobody knows." At least, nobody outside of Redmond. So far, the only copies of Windows Vista that have been distributed to the public and the press have been full retail copies. I have yet to hear from a single source that has actually seen one of these upgrade disks and documented the experience. Everything written so far is just speculation until those disks are in customers' hands tomorrow. This may turn out to be a headache, as predicted. Or it may turn out to be much ado about nothing.

Stay tuned...