Microsoft is offering “Microsoft Windows 8 Professional Upgrade” at a discounted price compared to the OEM version. However it states:
If you currently have a personal computer running Windows 7, Windows XP or Windows Vista then you can upgrade to Windows 8 Pro (Professional).
My question is what happens to the Windows 7 key that I use to upgrade? Will it become the Windows 8 key or will it generate a new Windows 8 key?
Basically if I upgrade using my Windows 7 key from my laptop for my desktop will I be able to continue using the laptop on Windows 7 while concurrently using Windows 8 upgrade on my Desktop?
When you use an upgrade version of Windows, you need to have a valid licence for a previous, eligible version of Windows. That licence is not freed up for use on another computer after the upgrade.
From the Windows 8 EULA (source: ZDNet):
The software covered by this agreement is an upgrade to your existing operating system software, so the upgrade replaces the original software that you are upgrading. You do not retain any rights to the original software after you have upgraded and you may not continue to use it or transfer it in any way.
Specifically, note the last sentence – you may not continue to use [the old Windows licence] or transfer it in any way. This means that if you use your Windows 7 licence on your desktop to upgrade to Windows 8, you cannot continue using it on your laptop, or indeed anywhere. It’s now essentially a part of your Windows 8 licence, though not permanently – if you reinstall Windows 7 and activate with your old product key, you can then use the upgrade licence on another computer.
The same terms applied to previous Windows versions as well. For instance, from the Windows 7 EULA (source: Microsoft):
15. UPGRADES. To use upgrade software, you must first be licensed for the software that is eligible for the upgrade. Upon upgrade, this agreement takes the place of the agreement for the software you upgraded from. After you upgrade, you may no longer use the software you upgraded from.
On a somewhat related note, if your Windows 7 licence came with your laptop (in other words, it’s an OEM licence), then you’re not even allowed to use it on your desktop – OEM licences are permanently tied to the hardware (specifically, the motherboard) they were originally sold with or first activated on.