Once Win 7 has been activated, the key from the previous activated OS is 'flagged' by MS servers and if an attempt to use it again, will fail automatic activation and we will call MS and explain that we need to install XP and activated before we can re install Win 7. If all the licenses and keys match, a phone activation will go smoothly ( that's presuming no major hardware has been changed.)

Personally I think this as all unexceptionable and there must be an easier way to validate the honest users that genuinely have a legal copy of XP, and want to purchase update media license

I will probably cancel my order for 3 update media licenses.