Microsoft has cut out this process for Windows Vista and forces users who buy an upgrade CD to actually have a valid install of Windows XP Home or Professional on their machines before upgrading. For most users, this wouldn’t be a problem. They more than likely have an existing copy of Windows XP installed and would have no problems upgrading to Windows Vista with an upgrade CD.
If I didn’t already have the full install of Vista, then this is one thing that would easily force me to purchase it. For people who re-format their PCs every year or two, this is no problem. But for those who re-format every couple weeks (like benchmarkers), it would become a pain -quick-.
I understand the reason behind this, but I think there could have been an easier way. My method would be to activate your copy of XP once, and at that time you could download a “verification” CD image which stores both your XP and Vista serial keys in an encrypted form. Then, when the time came to re-install, you could just boot up with this CD instead and once Vista knows your legit, you can swap discs. Of course, maybe Microsoft is just using this method to force people to buy the full version. Who knows.
Source: Daily Tech