Can 'Build 7601 Not genuine' MSDN copy be upgraded?

Hello and thanks in advance for the advice.

Last year I bought a computer from Ebay. It came from quite a reputable character who runs his own computer security/ethical forensic hacker company. To cut a long story short one day I got the 'black screen of death' on my computer stating that the windows wasn't genuine, build 7601. It runs windows 7 ultimate x64. I contacted the seller (even though it was about 6 months down the line) He told me that the copy of win7 on the computer was legitimate. I contacted Microsoft and they told me the copy had been blocked as it was an MSDN copy and it was apparent I was not a subscriber and was using it for home use. The seller refunded me £50 towards the cost of a new OS, although he still stated it was a legit OS, (personally I think he was embarrassed that he had been duped by a dodgy copy).

From reading blog after blog on this subject most people say that the copy will stop working after a while and it will not receive any windows updates. Im a year on now and other than having a black screen and the 'not genuine' watermark the OS continues to work fine and even receives updates. I would however like to put a wallpaper back on my screen and continue without the fear of the OS just shutting down on me one day.

So here is my question. My wife is a full time student and as such can get a reduced price genuine Windows 7 package. However these packages only seem to be 'upgrade' packages. The websites (software4students) state that you must have a current valid windows operating system installed on your computer for these upgrade packages to be accepted and work. Will these packages be accepted by my computer in its current state or is the MSDN copy forever shown as not genuine??

Many thanks