"Windows 7 Setup does its compliance checking before the phase of Setup where you format the disc. (Unlike with Windows Vista.) This means that you can format your existing hard drive, and blow away a previous Windows version, and not worry about activation. If it was there, Windows 7 will still activate."
OK just read this in his site. My mates PCs had Vista. But I'm sure I formated disk before starting. As I had two failed W7 installs before third stuck. But that was becuase he had DVI/VGA cables both connected and I did not notice!