Windows 7: Will it return back to factory state?

I am planning to upgrade my windows 7 home premium 64 bits to windows 7 ultimate 64 bit. Here is my question. After upgrading to windows 7 ultimate, can i return my laptop back to it's factory state (windows 7 home premium 64 bits) with the recovery dvds i made after buying the laptop?

Yes, you can.

You would have a much easier job if you did that from an image - e.g. of the current state. Image your system with free Macrium - Vista Forums and Imaging with free Macrium

does that program make an recovery disc of the OS?

It makes an image which you can write (store) on an external disk, on DVDs or in a seperate partition.

so if i burn an image with that program, i will be able to return to window 7 home x64 factory?

You return to the state as the system was when you burnt the image. That is a lot better than factory state (unless your system is defunct) because you do not have to deal with a lot of updates. Last time I did a reinstall (Vista), I had to deal with 300 updates. Took 3 days that orgie. A recovery from an image takes 30 minutes. And you do not have to reinstall any programs or redo any of your tweaks and settings.

it can be multiple disc right? Example: disc 1 of 3, disc 2 of 3, disc 3 of 3

As I said, Ideally you image to an external disk drive. But you can also image to DVDs. Look at the size of your data on C and then take appr. 55% of that. That will be the appr. size of the image. Now figure 4.7GB per DVD. Then you can calculate the #of DVDs.
Example: My Windows7 image is 9.45GBs. That would fit on 2 DVDs. But I have no user data on the OS partition because I have a seperate Data Partition. Your OS partition may be bigger and you may need more than 2 DVDs.

for the windows 7 ultimate upgrade, can I keep my current files? or do i have to install them again?