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what is the best and cheapest way to upgrade my xp 32 bit to win 7 ultimate 64 bit, processor is 64 bit and MB and I see the retail prices of a full win 7 ultimate, compared to OEM. any suggestiion?

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Your cheapest legal option is go buy a used copy on a site like eBay (these generally are from people who bought a retail copy and have extra license keys that are unused). Obviously, buyer beware, but eBay's reputation system should help you out there. Next cheapest would be buying an OEM license (usually around $100-105).

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