Windows Vista Upgrade Eligibility (Volume License)
Following are excerpts from Microsoft's Product List that detail Windows Vista upgrade eligibility

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Upgrade Eligibility Chart

Operating System (OS) Upgrade License:  The desktop operating system licenses granted under these programs are upgrade licenses only. Full desktop operating system licenses are not available under these programs. Therefore, each desktop for which you acquire and on which you will run the Windows Vista Business Upgrade or Windows XP Professional Upgrade (until Windows Vista Business is available in your region) must be licensed to run one of the qualifying operating systems identified above.

Windows XP Professional and Windows Vista Business Upgrades:  Customers who wish to acquire either the Windows XP Professional or Windows Vista Business Upgrade license through the Select License or Open License programs must first have licensed and installed on their desktop a qualifying operating system.

Qualifying OS Rules (Each of these conditions must be met in order for the base OS to qualify you for the VL Upgrade.):

► The qualifying OS must be installed on the device to which the VL Upgrade license is to be assigned.

► Except as provided below, you must remove the qualifying Operating System from the device in order to deploy the VL Upgrade license.

► Customers who wish to install or run more than one licensed OS at one time (including the qualifying OS), may either acquire Software Assurance for their VL Upgrade license, or purchase full Windows Vista licenses separately.  We do not offer full OS licenses in Volume Licensing.

► Customers that have active Software Assurance coverage do not need to uninstall the qualifying OS and may install and run the qualifying OS and Windows Vista at the same time.

Windows XP Home Edition: Windows XP Home Edition as a Qualifying Operating System (OS) for Windows Upgrade with Software Assurance:

► Customers* with Windows XP Home Edition licenses purchased on or before December 31, 2006 may acquire Windows Upgrade Licenses with Software Assurance (U & SA). This offer expires September 30, 2007.  For customers under Enterprise Enrollments and Open Value companywide agreements, this offer applies only to initial orders under new enrollments and agreements. It does not apply to subsequent orders under new enrollments and agreements, nor to renewal enrollments and agreements.

Windows Vista Enterprise and Ultimate (Must Have Software Assurance):  For each license:

a)      You may install and use additional copies of the software within up to four virtual (or otherwise emulated) hardware systems on the licensed device. You may not use more than one copy per system.

b)      If you run all five permitted copies on the licensed device at the same time, one copy must be used solely to:

·         run the hardware virtualization software, and

·         manage and service the virtual (or otherwise emulated) hardware systems on that device.

c)       You may install and use a second copy of the software on the licensed device in place of one of the copies permitted for use within virtual (or otherwise emulated) hardware systems above.

d)      You may use any edition (Business, Enterprise or Ultimate) or a prior version of the software in place of the licensed version for any of the additional copies permitted above.

e)      You must use either

·         Vista Enterprise or Ultimate edition, or

·         third party software

to run the hardware virtualization software and to service the virtual (or otherwise emulated) hardware systems described above. You may not use any other edition of Windows software for this purpose. This applies despite any downgrade right you may have under your license agreement.