Yes you still need to have an activated version of Windows. In-place installs can only be performed if you upgrade from a version of vista to a compatible version of Win7 (ie Vista Ultimate to Win7 Ultimate). If the versions do not match, then you need to do a clean install, but the activated version of Windows (vista or XP) is still required
to perform the upgrade.
Originally Posted by |MaguS|
I was under the impression that it checks to see if you have an active OS installed and once confirmed it will format and install Windows 7.
Correct. The "in-place" upgrade, which leaves your programs and files in place can only be performed for the following combinations:
Windows Vista Home Premium -> Windows 7 Home Premium
Windows Vista Business -> Windows 7 Professional
Windows Vista Ultimate -> Windows 7 Ultimate
This is taken from MS's Win 7 Upgrade site:
If you are not going in this order (for example, I am going from Vista Ultimate to Win7 HP), then you have to do a clean install. It will place your old install in a Windows.Old folder and install Windows 7 fresh.