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I HAVE got an UPDATE disc. This means, I can update from an existing Vista. I cannot install Windows 7 "from scratch".
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You CAN do a clean install of Windows 7 from the upgrade disc. The disc has the same install files as a full retail or OEM disc. It's the key that is the difference.
Many people have used the "Upgrade" discs to do a clean, fresh install of Windows 7.
Go here to Paul Thurrott's SuperSite for Windows to find out how to do it:
Clean Install Windows 7 with Upgrade Media
I have personally done 4 installs for friends using their upgrade discs for a clean or custom install as MS calls it.
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I there's someone having a solution for safely getting rid of that one, please let me know.....
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You can download a free copy of Partition Wizard CD ISO image file to burn onto a CD to do a boot partitioning. Excellent software by the way.
Download Bootable CD It's a 38MB download and the burn the ISO to a CD with an image burning program like ImgBurn, which is free too.
As C_C stated, IF you create the partition for the Windows 7 install first, with a program like Partition Wizard, then Windows won't make that 200MB partition. It's really no big deal though. Since it's apparent you don't like it then do the partitioning first before doing the install.