What I do, for Windows 7 upgrade versions, is to install windows 7 twice on the same partition. The first time, don't enter a CD key, (it will be in trial mode for 30 days, but you won't need it that long.) Then, once that's installed, start over, and when you select which OS to upgrade, pick the OS you just installed.

Windows 7 when doing an upgrade install simply moves the old files into a "windows old" folder, and does a clean install.

I wish the windows upgrade installers worked like the Adobe Acrobat installers, and merely asked for the Key of an older version. Or at least to insert a disc to prove you have it. Having to install Any OS, just to allow an "upgrade" os to work with proper licensing is not a good way to treat paying customers. Frankly it's just easier to do it the illegal way...