Unfortunately, it sounds as if proper protocol has been followed. An upgrade license comes at a reduced cost because it requires ownership of a previous qualifying version. Further, because of past abuse of the system, inserting the CD of the previous version during installation is no longer sufficient for proving prior ownership. Instead, an actual upgrade installation is typically required. There is a known workaround, where you can install Windows Vista without entering your product key, then upgrade to Windows Vista using your upgrade product key, thus avoiding having to install Windows XP first, carrying over any remnants it may have. However, this process typically takes longer than installing Windows XP and then upgrading to Windows Vista since the Windows Vista installation takes longer than Windows XP's. It is just part of the compromise for the reduced price.
Also, complaints to representatives in the activation department are logged, and there is no formal complaints department for such situations, so you have more or less exhausted the feedback options. Thus, my advice is to install Windows XP, then upgrade to Windows Vista, as was originally intended.
I find myself in a position that would no doubt make anyone very mad. After buying the original Microsoft Windows for Workgroups 3.x years ago and then upgrading to Win 95, Win98, Win 98SE, Win XP Home, Win XP pro and finally to Windows Vista Premium less than two years ago, I am now being told that I can?t activate it and that I have to buy another copy. Here are the facts:
Having Win XP Pro on my PC, I upgraded to Windows Vista Premium and later upgraded my motherboard and installed a larger SATA hard disk. Of course, this hardware upgrade required that I reinstall Windows Vista and this in turn requires reactivation of the OS.
But when I got around to do this activation yesterday, I received an error code and a message that said something like