1. It is very unlikely that you can boot from this HDD on a new system. Besides the inherent driver
problems you would also have an activation problem.
2. If you do an upgrade install. you should get a windows.old folder. But you may be taking your chances.
3. I suggest to first save your files (maybe on a friends system with an external USB enclosure).
4. If you have less than 4 primary partitions on that HDD, you could define a new primary, active partition on the drive (if you can shrink enough space). You then could make a clean install to that partition with your upgrade disk
To shrink space and to define a new primary active partition on this disk, use the bootable CD of Partition Wizard
. It is the last entry on this webpage which you download and burn to cd (.g. with Imgburn
But before you define the new active primary partition on the drive, make sure you deactivate the current active partition which is most likely C: or the system partition. The controls in Partition Wizard are under the Partition tab > Modify.
If there are already 4 primary partitions or 3 primary partitions and an extended partition on the drive, post back. Then we have to do some more work.