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Normally when you install the 32-Bit version of Windows 7 Professional upgrade package, it is installed on top of Windows XP or Vista. The 64-bit edition, however, requires that you do a clean install--erasing XP or VISTA before installing the 64-bit version of Win7. This is because you can't install a 64-bit version OS over top of a 32-bit version.
When you are installing the 32-bit version of Windows 7 Pro or Ultimate upgrade and you have replaced your PC's hard drive or reformatted it in order to do a clean install, or your system crashed, requiring a reload of Windows 7, you are technically required to first re-install XP or Vista and then upgrade that OS to Windows 7. Of course this may never be a viable or acceptable practice.
To install Windows 7 Pro/Ultimate from an upgrade disc onto a PC that does not already have a previous version of Windows (XP or Vista) installed on it do the following:
Wait for the PRODUCT KEY dialog box to appear during the install (it also contains the "Activate Now" button). Leave the PRODUCT KEY blank and uncheck the "Activate Now" checkbox and then press Next. It will continue the install normally. If you enter a PRODUCT KEY or check the "Activate Now" button during install, the install will stop and tell you to install a previous version of Windows (XP or Vista) before installing Windows 7.
Once Windows 7 is installed, if the Automatic Activate Windows feature runs or you run the Activate option (which is required within 30 days of install) and you enter your UPGRADE DISC PRODUCT KEY, it may return a 0xc0040f61 message. This cryptic message means "you must uninstall Windows 7, install XP or Vista 32-bit edition, then activate XP or Vista and then upgrade that version of Windows to Windows 7. This is of course, what we are trying to avoid.
To work around this problem, there is an automated fix that that you can get from Microsoft tech support. This fix, however, requires (currently) a long series of telephone transfers from one department to another, but in the end, they will send you a special fix code that you can enter into the Windows Diagnostic Tool and your problem is solved.
However, if you don't want to call Microsoft or its in the middle of the night and you need it working now, the following manual steps may solve the activation problem. One caveat, I don't believe this works for the Windows 7 Home Edition; it requires Windows 7 Pro or Ultimate and is only necessary for the 32-Bit upgrade editions of those operating systems. The 64-bit editions do not have this issue.
Once you've installed Windows 7 Pro/Ultimate 32-Bit upgrade editions on a new or recently re-formatted hard drive, and need to enable activation with an UPGRADE PRODUCT KEY, run the following steps:
Have a nice day.