From what I read earlier this only works with Windows 7 and the "upgrade" is applied by the OS at boot time. What happens if:
1) You use another OS
2) You use Win 7, buy the upgrade, then switch to another OS
3) You carry on using Win 7 but re-install at some point
4) The software malfunctions at some point down the line
It works for mainframes where you always have a service contract with the supplier who turns it on. In the PC market it seems to have a lot of the same issues as DRM.