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Microsoft today confirmed that users can apply a workaround trick to do a clean install of Windows 7 on a blank hard drive as long as they toe the licensing line.

In a blog post earlier this week, Eric Ligman, who works in Microsoft's worldwide partner group, took exception to stories that showed people how to use the less expensive Windows 7 upgrade editions to install the new operating system on blank drives.

"Over the past several days there have been various posts, etc. across a variety of social media engines stating that some 'hack' (be it a person or a procedure) shows that a Windows 7 Upgrade disc can perform a 'clean' installation of Windows 7 on a blank drive from a technical perspective," said Ligman.

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"They often forgot to mention a very basic, yet very important piece of information," said Ligman about Thurrott's blog post and the resulting reports by others. "'Technically possible' does not always mean legal," Ligman said.

In order to use upgrade media to install Windows 7 on a blank hard drive, users must abide by the operating system's EULA, or end-user licensing agreement (download PDF). "To use upgrade software, you must first be licensed for the software that is eligible for the upgrade. After you upgrade, you may no longer use the software you upgraded from," the EULA states.

That, said Ligman, means users must either have a "full" retail licence of Windows XP or Vista, or assuming the Windows 7 upgrade is applied to an existing PC, that the upgrade is done on that same machine, which has a so called "OEM" licence attached to it.

"There are many, many, many, many of you out there that already own Windows licences that qualify for the Windows 7 Upgrade, so this is a non issue for you," said Ligman. "For you, since you have the previous version FULL Windows licence and qualify for the Windows 7 Upgrade, you have the rights to do a 'clean' install."

On PCs purchased with Windows XP or Vista preinstalled by the computer maker, which slap an "OEM" licence of Windows on the machine, users can install a Windows 7 upgrade edition on that system's blank hard drive, but on no other, Ligman added.

"An OEM licence is a full licence," Ligman wrote in a comment to this blog post, answering a user's question. "So an OEM + an upgrade gets you the upgraded version."

A Microsoft spokeswoman today confirmed Ligman's account of when it's permissible to use upgrade media, which costs up to £70 less than the same version's "full" edition, to install Windows 7 on a blank drive. "You can always do a clean install if you're upgrading, so long as you're upgrading a machine that's already running genuine Windows XP or Windows Vista," she said in an instant today.

A slightly less expensive alternative to a "full" licence of Windows 7, and one that can be applied on a blank drive or on a new PC that the user has assembled, is a retail "OEM" edition.

OEM copies of Windows are traditionally cheaper because they're intended for small scale system builders who install them on new custom crafted PCs. There's nothing to prevent an individual user, however, from buying and installing an OEM version of Windows on their PC.

The downsides to an OEM edition are that the licence bans users from transferring the operating system from one PC to another, it comes sans support of any kind, and it can only be used for a so called "clean" install, which requires that data and settings be restored from backups, and applications be reinstalled, after the operating system is on the drive.

Severalreaders pointed out that an OEM licence for Windows 7 costs even less than an upgrade. "You could save even more money if you just buy the OEM versions from places like TigerDirect or Newegg," said an anonymous commenter of last week's story on the upgrade trick.

Unlike a Windows 7 upgrade, an OEM edition can be used to install the new operating system on a brand new, and thus blank, virtual machine, making OEM licences attractive to users, such as people who own Macs, who want to run Windows 7 in a virtualised environment, such as VMware's new Fusion 3.

Users can deploy three different versions of Windows 7 in a virtual machine: Home Premium, Professional and Ultimate.

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