Microsoft’s licensing terms and antipiracy measures for Windows started getting more complicated after it launched Windows Genuine Advantage two years ago, much to the chagrin of confused customers. But with Vista, Microsoft seems to have confused itself, creating a loophole for customers with a do-it-yourself outlook to save as much as £95 per copy of Vista.

Microsoft has confirmed reports circulating on the internet that anyone can buy and install an upgrade version of Vista, even on a computer without Windows XP or 2000 already on it.

Here's how the ‘clean install’ trick works:

-Boot with the Windows Vista upgrade DVD and begin the full installation process.
-Do not enter the product key when prompted, but continue on.
-Choose to do a clean install of Vista, that is, fully wiping your hard drive.
-After you're done, boot into the still-unactivated copy of Vista.
-Run Windows Vista setup again, from inside Vista.
-Select upgrade, and enter your upgrade key.
-Install Vista a second time.

Essentially, Vista is fooled into upgrading itself, thus allowing customers to avoid the need to have a prior copy of Windows XP or 2000 installed on that computer. While time-consuming because of the double installation, advocates say this workaround not only allows users to do a fresh install of Vista, which they say will run more reliably, but can save some customers money. The amount depends on which flavour of Vista a customer gets.

The difference between the full and upgrade price of Vista Home Basic was over £80 at the time of going to press (£164 versus £83). For Vista Home Premium, it is £60 (£194 versus £135). For Vista Ultimate, it’s nearly £95 (£319 versus £215).

A Microsoft spokesperson said the company is "well aware of the workaround”, which they added "violates the terms of use agreed to when they purchased the upgrade version of Windows Vista. As such, we believe only a very small percentage of people will take the time to implement this workaround, and we encourage all customers to follow our official guidelines for upgrading to Windows Vista, which can be found at, instead."

Microsoft is right: for people, the workaround will prove to be irrelevant. Why? Because most larger corporations buy Vista in volume licences, which are usually discounted off the list price. For consumers and small businesses, the vast majority will get Vista pre-installed when they buy a new PC. Buying a new PC without an operating system on it and then installing an upgrade version of Vista might actually cost more than buying a new Vista PC because of the low price Microsoft charges OEMs to pre-install Vista, along with other discounts that it offers.

Indeed, the types of person most likely to benefit from this workaround are power users and hobbyists who own multiple computers running Windows as well as Linux and Mac OS X. Such users may argue that they are such good customers of Microsoft that they should be allowed to save a little bit of money when Microsoft makes a mistake, such as when a retailer is forced to honour an incorrectly price.

But Microsoft remains officially adamant. The spokeswoman noted that customers buying and installing an upgrade version of Vista onto one PC also forfeit the right to use XP on another PC, unless they own more than one full retail copy of XP.

"This is part of the end user license agreement the customer consents to by purchasing a retail upgrade version. We believe it strikes a fair balance for our customers, since upgrade versions allow them to purchase Windows Vista at significantly reduced prices," said the spokesperson. Only customers who pay for full retail versions of Vista "maintain the right to install their previous versions of Windows”