There has been quite a bit of controversy over how Windows Vista upgrades work. Many people like to do a fresh clean install of a new operating system and then transfer their data. With the new Vista upgrade process, though, you must already have XP, or another compatible OS, installed and activated on your computer before you can run the update. The update must also be done directly from within the previous OS rather than booting off of the DVD to do the upgrade. To make matters even worse when you update to Vista from within XP, it invalidates your old XP product key so that it can not be used for product activation again.
Paul Thurott, though has found a method that allows you to perform a fresh clean install on a completely clean drive using a Vista upgrade version. This works because Microsoft treats Vista, even a 30-day trial, as a legitimate upgrade path to Vista. To install a trial all you need to do is boot from the DVD and run the install. When it asks for a product key, skip it, and a 30-day trial will be installed. This whole process is broken down step-by-step at the link below.
Now this may seem like an awful lot of steps to get a clean install of Vista on your computer, but when you consider the cost savings between purchasing a Full version of Vista compared to an Upgrade, many will find it worth it. This is a big mess up on the part of Microsoft as now any Vista upgrade is essentially a Full version.