Windows 7 Upgrade Path Question

My friend wants to take advantage of the Windows 7 upgrade prices, but he asked me an interesting question about whether or not he'd be eligible. He is currently running XP Pro, and I know that you qualify for the upgrade (by clean install) by having XP. However, he told me that his copy of XP isn't legitimate. I'm not sure if he has a volume license installation or what, but he did tell me that Windows doesn't nag and appears as if it's genuine and activated. He wanted to know whether or not the Windows 7 upgrade disc would check for a genuine installation or if it would just recognize that XP was installed and that was good enough to qualify. I thought the latter was right, but he wanted me to ask around before he threw down the $50. Anyone have some insight?

Alright, it's always good to play it safe. Thing is for him is that he's on the fence on whether or not to upgrade. He's tried 7 and he is still ok sticking with XP. I've been trying to push him over the edge to upgrade. I know that if he has to pay any more than the $50 to upgrade to 7, it's never going to happen =/.

By the way, I forgot to check on whether or not this type of discussion is allowed on these forums (I know it slightly involves talking about illegitimate windows). If this is against the rules, I apologize. I'm not meaning to endorse piracy at all.

Thanks for investigating for me, Zay, I really appreciate it. I remember XP working how you stated, which is what led me to believe that it might work with Windows 7. I also thought that Microsoft would appreciate a customer going from illegitimate to legitimate and cut them a small break. But again, I was merely speculating and that's why I wanted to ask =). If you find out any more information, I'd be happy to know.

It does not matter if XP is pirated or not because you will be doing a clean install so you can use the double install method. Windows 7 Upgrade Guide: All Your Questions Answered

Thanks to everyone who replied, you were all most helpful!