I've never heard of that restriction. Do you have a link to that article?
But in any case, I am not sure of the problem here. Even if it was right that one should be Win 7, since you have Win 7, doesn't that solve the issue?
As to your other question, again I am unsure of the issue. You have a Dell with Win 7. That is an OEM machine, and the Win 7 installed on that cannot be transferred.
I do see that Windows 7 Starter Edition cannot be connected to a Domain. But that is not what you want to do, so I see no problems with what you want to do.
i just bought a dell latitude D40 which has win 7 starter installed for the OS. i have 3 other pc's all networked (home network) together and all have win xp prof. i would like to network the the dell (win 7 starter) to the other 3 computers but after doing some research i find that one of the pc's on the network must have win 7 for an OS.just to be sure i'm understanding correctly, is this true ? I'm probably going to have to reformat and reinstall windows on one of the pc's on the network pretty soon. when i reinstall windows, could i install win 7 starter or would i need to install the full blown version(so that i can network the laptop to the other 3 already on the home network