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.. or am I really asking too much of the upgrading license, and should just buy a new full Windows 7 /8 ?

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Right now Microsoft is running a sale on Windows 8 Pro upgrades from most any previous version for $39.99 (US market). Note, however, that if you run the upgrade analyzer and then the download from this XP system, it will only download the 32-bit version of Windows 8.

You can, and it's been documented as working, make the purchase but then download the file from a Windows 7 64-bit system. The installer will be a 64-bit Windows 8 installer, but it will be a clean install. So you'll need to reinstall all apps.

Make sure you back up your files somewhere.

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You need to do a clean installation to upgrade from Windows XP to Windows 7, but according to this thread

Any Windows 7 Upgrade license can be used to install Windows 7 on a computer that is currently running Windows XP.

Although i must admit I don't see that in the tutorial

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