Understanding your installation choices.
How you acquire Windows Vista play a large part in any decision about how you will actually install the operating system. At a high level, you have the following basic choices:
Clean install. With this method, you boot the PC from the Windows Vista install DVD, run interactive Setup, format the PC's hard drive, and install Windows Vista as the only OS. This is probably the rarest way to get Vista on a PC. You can use a "Full" or "Upgrade" retail version of Windows Vista to perform a clean install, though you will need "qualifying media"--typically a Windows XP or 2000 CD that proves you qualify for the Upgrade version.
Upgrade. Here, you insert the install DVD from a "Full" or "Upgrade" retail version of Windows Vista while running Windows XP and perform what's called an in-place upgrade. The Setup process is similar to that of a clean install, but most of your existing applications and all of your data files will be available and working properly once the upgrade is complete. Unfortunately, there are a number of qualifications to the upgrade process in Windows Vista. First, you can only upgrade certain versions of Windows XP to certain versions of Windows Vista. Here's a chart that explains which XP versions can be upgraded: