Technically, you are correct. You can't "upgrade" windows XP to windows 7.
But, a student license can't be installed on a PC that does not have a genuine XP of Vista installed on it.
The way I installed win 7 is to boot from the DVD, then choose the upgrade option. Try this with a vista installation and you'll get a message stating you should start the upgrade process from vista. When XP is detected however, it installs Win 7 over XP. So it is technically not an upgrade, since XP is removed by the installer, not upgraded.
The clean install option is available for me when I boot the DVD. The installation also works perfectly, until win 7 boots for the first time and I'm asked for the key. Then I get a message that my key is invallid. This is because of the limitations of the student license... So "upgrading" even if it is not really upgrading, is my only option.
I'm not interrested in keeping the settings from the XP installtion. I preffer a clean install myself, that's why I tried that first (formatted my drive and installed win 7) even though the installation documentation clearly stated it was not possible with the student license. When that failed, I reinstalled XP and chose the upgrade option.
Rick