I have Windows 7 OEM version installed on my PC at the moment and I want to upgrade my motherboard, CPU and graphics card, but I've been told that an OEM version of Windows will not boot if I change the hardware. If I upgrade to Windows 8 first then install my new hardware, will that work?
Technically, it will probably work. In fact, you can probably do the swap before the upgrade and Windows will still boot (though it will fail activation).
The problem here isn't whether it's technically possible, though, but whether it's legally allowed. Unfortunately, it's not. OEM licences are permanently tied to the hardware (specifically, motherboard) they were bought with or first activated on.
This means that if you swap the motherboard, you can't keep using your Windows 7 licence on that computer, since the licence is tied to the old motherboard. Therefore, the post-upgrade computer won't be eligible for the Windows 8 Upgrade since you don't have a valid licence of a previous Windows version for it.
Same applies if you do the hardware upgrade after upgrading to Windows 8. Since the Windows 8 Upgrade requires a valid licence of a previous version of Windows and your post-upgrade PC no longer has one, you'll be breaking the terms of the EULA if you continue using Windows 8. Essentially what you're trying to do is equivalent to upgrading a computer to Windows 8, then taking the hard drive out and putting it in a completely different computer that doesn't have a valid upgradeable licence.
Your options are either to buy a retail version of Windows 7 for the new motherboard and upgrade from that, or just buy a retail (or system builder) version of Windows 8.
YES, upgradiing from any OEM license to a Windows 8 Pro Upgrade from a store or from Microsoft directly WILL make your Windows 8 Pro Upgrade into a full Retail license. The Upgrade EULA supersedes your prior OEM EULA, and your prior OEM restrictions (including the restriction of transferring the OS to another computer you own) is null and void.
Source: Microsoft Software License Agreement for Windows 8 Pro Upgrade
EULA (Page 1 and part of Page 2): [URL=http://imageshack.us/photo/my-images/801/windoes8proupgradeeula.jpg/][IMG=http://img801.imageshack.us/img801/8992/windoes8proupgradeeula.jpg][/IMG][/URL]
MICROSOFT SOFTWARE LICENSE AGREEMENT WINDOWS 8 PRO
(Excerpt from Page 1 & 2; Emphasis by way of ALL-CAPS is mine)
WHAT ABOUT UPGRADING THE SOFTWARE?
The software covered by this agreement is an upgrade to your existing operating system software, so the upgrade replaces the original software that you are upgrading. You do not retain any rights to the original software after you have upgraded and you may not continue to use it or transfer it in any way. THIS AGREEMENT GOVERNS YOUR RIGHTS TO USE THE UPGRADE SOFTWARE AND REPLACES THE AGREEMENT FOR THE SOFTWARE FROM WHICH YOU UPGRADED. After you complete your upgrade, additional software will be required to playback or record certain types of media, including DVDs.
CAN I TRANSFER THE SOFTWARE TO ANOTHER COMPUTER OR USER?
YOU MAY TRANSFER THE SOFTWARE TO ANOTHER COMPUTER THAT BELONGS TO YOU. You may also transfer the software (together with the license) to a computer owned by someone else if a) you are the first licensed user of the software and b) the new user agrees to the terms of this agreement. To make that transfer, you must transfer the original media, the certificate of authenticity, the product key and the proof of purchase directly to that other person, without retaining any copies of the software. You may use the backup copy we allow you to make or the media that the software came on to transfer the software. ANYTIME YOU TRANSFER THE SOFTWARE TO A NEW COMPUTER, YOU MUST REMOVE THE SOFTWARE FROM THE PRIOR COMPUTER. You may not transfer the software to share licenses between computers. You may transfer Get Genuine Windows software, Pro Pack or Media Center Pack software only together with the licensed computer.
My Personal note:
Many people on forums have assumed that the Registry Mod and the Install-Over-Install workarounds for Clean-Bare-Metal install activations are illegit hacks that violates the Windows 8 Pro Upgrade EULA. However, in reading the EULA, two things are obvious: (1) this Retail EULA supersedes the OEM EULA, and (2) the Windows 8 Pro Upgrade is transferable to a new computer/motherboard. Hence, I believe that Microsoft intentionally created a method in which clean-bare-metal installation activation can be achieved using the Windows 8 Pro Upgrade ISO.
How this method was meant to be accessed is another question: (A) End-user self-service or (B) Remote-assist by Microsoft Customer Service Agent.
So for the original question, YES, get the Upgrade, and your old OEM becomes Retail.