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Once you have some edition of Windows 7 on your system, whether you purchased it via an OEM or just upgraded from Windows XP or Windows Vista, you will be able to upgrade to a "more premium" version of Windows 7 by purchasing an upgrade key to unlock additional features, just as with Vista. For example, you could start off with Windows Vista Home Premium, upgrade to Windows 7 Home Premium, and then later choose to upgrade to Windows 7 Professional.
Both Windows XP and Windows Vista come with Internet Explorer, and the upgrade editions of Windows 7 were never tested to handle the installation of Windows 7 without Internet Explorer.
Windows 7 E editions will be sold only in full versions: there will be no upgrade versions available in the European Union.
The good news is that the full versions will be available at the upgrade price, though if history is any indication, they'll likely still be higher than the US upgrade prices shown above.
When you switch to a higher version, you're adding on the existing functionality, but when you're going to a lesser version, you're taking away functionality, thus the need for a clean install.
Clean installs will also have to be performed when upgrading from a 32-bit version to a 64-bit version, regardless of edition.
However, Microsoft has not touched the pricing for the Professional edition (previously called the Business edition).
Microsoft chose the last solution, and it's actually a pretty good one, for both Microsoft and consumers.Thankfully, retail pricing is typically used as a starting point; most users will not be buying retail versions anyway.Retail sales account for less than 5 percent of Windows sales, the rest of sales are via OEM.Some consumers will either grab an OEM copy via an online or in-store purchase, but most will be getting a copy of Windows 7 with the next purchase of their PC.Windows XP users need to know that regardless of which edition they currently have installed (Windows XP Home, Windows XP Professional, or Windows XP Media Center Edition) and regardless of which edition of Windows 7 they are moving to (Home Premium, Professional , or Ultimate), they will need to perform a clean install, whether they buy the upgrade or full version.
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The hassle of backing up applications and user data will fall on the user; a clean install will not back up anything.