Doesnt this have limitations?
I dont think the disks are bootable.
If you fubar the system and need to reinstall do you have to install vista or xp then upgrade again?
Will mirroring backup programs work with these disks?
Correct me if I am wrong..
Yes you are wrong.
The disks ARE bootable.
They also contain the same information as a FULL INSTALL disk would. They have to, because there is no 'upgrade path' from XP to 7, which means an upgrade from XP requires a disk wipe whereas an upgrade from Vista doesn't (although I would recommend it anyway).
When in installed my first licence in nov '09 I wiped my hard drive first before installing it. I figured it would have asked for my old XP disk or the license number or something, but it never did. It went right through and even activated just like a full install would. This was the 64bit version.
I gave my dad license #2. His hard drive had crashed so I installed Win7 on his new drive. Again it went right on through never asking for the XP disk or number or anything.
License #3 went on my G/F's computer, and again.. a wipe/install went through without a hitch.
I had read about a 'registry hack' you can do on first boot to make it think that you just installed a full version disk and not an upgrade disk and was prepared to use that method should it become necessary, but it wasn't.
Because of my experience, I would say that it IS possible to install these disks just as you would a full version, but what is questionable is the legality of it all. I have no problems with mine because all three computers had legal, activated versions of XP installed beforehand.