For older versions of Windows (e.g. XP) you just need the older CD; in 7 it wants to see a previous version of Windows installed, HOWEVER it will still install straight-up from an upgrade disc (the Microsoft MVP is wrong/lying) - it doesn't complain or anything (and there is no "hack" or "trick" to this - you just install from the DVD like usual). The catch is that it will not automatically activate during install (I rarely ever do this with Vista/7 anyways, because I've had problems with it working properly over the years even on full retail or OEM copies that are supposed to be capable of it, so just "skip" activation there), and has to be activated once you get onto the Windows desktop. For non-Upgrade copies it should just activate right there (may have to call the hotline depending on WGA), for Upgrade copies there is a registry key that has to be flipped to make it prompt for activation properly, and then (assuming you have a genuine/legal key) you proceed as usual.
As far as versioning on Windows, OEM copies are generally cheapest, but "transfers" are a grey area. Upgrade and Retail copies are "open for transfer" but Upgrade copies will need an extra few minutes of work to activate properly (and I've had to do this even when running an upgrade, not just as a clean install - I don't know if WGA just doesn't properly work with Upgrade or what).
