Paul Thurrott posted a guide about upgrading from a Higher-End Vista/XP Version to a Lower-End Windows 7 Version

Here's the deal. You're running some version of Windows Vista. But you want to upgrade to a lower-end version of Windows 7. For example, perhaps you have Windows Vista Business or Ultimate, and you want to "upgrade" to Windows 7 Home Premium.

Should be easy, right?

Should be, but isn't. Here's how it works. Anyone using a valid, activated version of Windows Vista (or XP) qualifies for any Windows 7 Upgrade version. But in order to perform a "true" (or "in-place") upgrade, you must be upgrading to an equivalent, or higher-end, Windows 7 version. That process is very straightforward, and you can read about it my previous article, Upgrading from Windows Vista to Windows 7.

Upgrade from a Higher-End Vista/XP Version to a Lower-End Windows 7 Version