I don't remember where I saw the explanation we are discussing - may have been in an online magazine article or on a Microsoft Connect blog or - - I forget at the moment. I will find it soon. Microsoft's position on this is: For instance, If you bought a copy of Windows Vista Home Basic (whether a retail box or preinstalled on a new computer) you paid a certain price for it. You could have used that OS, or for a certain (hefty) additional price, you could have upgraded it to Windows Vista Ultimate, but you chose not to spend the money for the upgrade to Ultimate. Now, since you only paid for Vista Home Basic, that same level is all that you can upgrade to with an UPGRADE installation key. If you wish to move to a higher level when you install Windows 7, you have to pay the same (or equivalent) upgrade price premium that you would have had to pay to make the same level upgrade in Vista. If you buy a Windows 7 Ultimate retail box, you will have paid the premium price and can upgrade any lesser version to that level. You wanna play, you gotta pay! You know Microsoft ain't gonna give nothin' away.