There is a workaround to in-place Upgrade or Downgrade from your installed version.
You make two small changes in the Registry to trick the installer into thinking it is doing an (always allowed) Repair Install
of the same version.
Browse to the Registry Keys shown below and Edit to read exactly HOMEPREMIUM
for the EditionID, and Windows 7 HOMEPREMIUM
for the ProductName.
click to enlarge
Then boot the Home Premium DVD, connect to internet to get latest updates into installer, choose Upgrade install, resolve any conflicts given. Afterwards insert the Product Key at Computer>Properties link to Activate.