Provided that Vista Ultimate license is not in use on any other system, you have the right to use it to upgrade the laptop to Vista Ultimate. However:
1.) Changing the key will make Windows declare itself to be an illegitimate copy (with reduced features and annoying reminders), not upgrade it. This is due to an upgrade procedure modifying the installed OS and adding the files required for additional functionality, not just flipping a switch.
2.) You can post the exact error message here, but there are times where the manufacturer's modifications will cause an upgrade to fail. In that case a clean install is your only option, though you can use an upgrade media/license to do so in such a case.
Is it possible to upgrade an OEM copy of Vista Home Premium using a retail copy of Vista Ultimate? I was given a Dell XPS 1330 with Vista Home Premium installed but would like to use the retail copy I purchased for my last PC to upgrade this laptop. I running setup from the disk and was not successful. Is there a way to just change the key? I don't want to have to wipe the existing install. Thanks.