http://www.dailytech.com/Article.aspx?newsid=5932

haha amusing... don't buy the full version :P

The way I read it this is how I understand it:

1. You start with an upgrade disc and your compuer with an older version of windows on it.
2. Do the Vista Upgrade.
3. Reinstall Vista - choose clean install or whatever, it formats and installs fresh.

The next time you need to reinstall Vista, you just do the clean install option.
The upgrade disc looks for a Windows OS on the HD in order to upgrade.
When it sees Vista on the HD, you can do a clean install from the Vista Upgrade disc.
As opposed to having to reinstall XP or 2K or 98 1st.

Prior to Vista, a Windows upgrade disc meant you had to reinstall an older windows BEFORE using it.  Now you can 'upgrade' Vista itself... just in case there's any confusion... even though I haven't tested it for myself ;)