If you are upgrading from Vista, an "in place" upgrade can only be done with an identical version of Windows. If you want to either change the version (home premium to pro, for example), or switch from 32-bit to 64-bit, you will need to format and do a clean install. The Upgrade version can be used for this, but you'll have to select clean install.
If you already have Windows 7 installed and just want to upgrade the version (home premium to professional), use the Windows 7 Anytime Upgrade. To do this, type "anytime" in the in the Windows Start Menu Search box. Just run the utility and it will give you the pricing options from your current version of Windows. You won't have to format to do this type of upgrade, as it just enables some features that are already there (but MS will charge you to do the upgrade).
