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WinSuperSite
Here's how to clean install Windows 7 using Upgrade media and a new or reformatted PC with no installed OS.
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First, perform a normal clean install of the OS by booting the PC with the Upgrade Setup disc and stepping through Setup.
After performing the clean install, ensure that there are no Windows Updates pending that would require a system reboot. (You'll see an orange shield icon next to Shutdown in the Start Menu if this is the case).
Then, open regedit.exe with Start Menu Search and navigate to:
HKEY_LOCAL_MACHINE/Software/Microsoft/Windows/CurrentVersion/Setup/OOBE/
Change MediaBootInstall from "1" to "0".
Open the Start Menu again and type cmd to display a shortcut to the Command Line utility. Right-click this shortcut and choose "Run as administrator." Handle the UAC prompt.
In the command line window, type: slmgr /rearm
Then tap ENTER, close the command line window and reboot. When Windows 7 reboots, run the Activate Windows utility, type in your product key and activate windows. It should just work.
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Note: You must have a qualifying licence of a previous OS for this to be considered legal.
These are installation techniques, not avoidances of your legal obligations.