According to Microsoft’s new licensing terms, if you want to install Windows Vista using an upgrade DVD, you will need to do it from within Windows XP everytime. So for example if you have to format your PC in the future, you will need to install Windows XP first and then later upgrade to Windows Vista. This will not only take time but you’d also need to ensure that you have an XP CD handy.

Paul Thurott, in his Windows IT Pro article, describes a workaround to clean install Vista OS from a Windows Vista Upgrade DVD without needing to do an in place upgrade everytime:

1. Boot with the Windows Vista Upgrade DVD and when the setup program starts, click “Install Now.”
2. Do not enter a Product Key when prompted. This will install Windows Vista as a 30-day trial.
3. When prompted, select the Windows Vista product edition that you have purchased and install Vista normally
4. Once setup has been completed and you have been brought to the desktop, run the setup from within Windows Vista once again
5. This time, enter the product key when prompted
6. When asked whether to perform an Upgrade or Custom (Advanced) install, choose Custom (Advanced) to perform a clean install of Vista.
7. Once setup completes, activate Vista.
8. Delete the Windows.old directory which contains information from the initial installation