Doing a double install
This method is the longest method but it will work. This method is approved by Microsoft. To install, do the following
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Install Windows by booting to the DVD. Click here for instructions
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Once the install is done and the registration fails, put the Windows 7 Setup DVD in the optical Drive (if it is not in the drive)
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Navigate to the drive and double-click the Setup in the DVD disk directory.
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Choose Upgrade (Do not choose Custom)
Activation should work this time.