The computer in question is a CTL TW3 laptop that originaly ran Vista Business. I had replaced the hard disk and clean-installed XP Pro 32 SP3 on it. When it came time to upgrade, I originally replaced the disk with a clean one then tried a custom (clean) install of Windows 7 Ultimate 32 (machine won't support 64-bit). That failed activation because I was using "Upgrade" media. I put the original XP disk back in and ran the Win 7 installation from XP, and it worked fine.
I bought an Upgrade version of W7 Ultimate SP1. In my situation, starting from a running XP installation (or from Vista, if I left it that way) you don't need to supply the drivers. If you are dealing with an over-the-counter computer, you should restore it to factory defaults, either from the hidden partition, or from factory media. My CTL TW3 came with a Vista setup disk that was customized for the laptop, and included all of the drivers as part of the installation. No activation was required, it was already done. They also included another CD with all of the drivers on it along with the user manual.
If you are going to start from a clean install of XP or Vista, then you need the drivers. It's best to do a factory restore.
Your friend's computer will have a hidden partition on the disk that contains the setup files for his machine. Manufacturers vary on how to get at that partition. Sometimes it takes a "secret handshake" during POST. Sometimes, there's an option either in setup or on the POST screen to "Restore the machine to factory defaults". Sometimes the user is offered the option of creating a DVD with that software on it. For your system, do a Google search for "restore mfr computer to factory defaults", replacing mfr with your brand and model. For example, "Dell Inspiron 9400". Note that if the disk fails, he's screwed and will have to go to factory tech support. Best if he can produce a DVD with the restoration software on it BEFORE it fails.
As for Micro$oft, no they were a little snippy about it. I was only informed that the key was invalid, not why. They probably figured on selling another copy of W7. After a bit of research I discovered the reason - should have run the upgrade from a running system, not tried to boot on the disk and do a clean install.
Hope this helps.
Edited by davnel, 05 November 2013 - 06:07 AM.