Hi!
Answers to your questions as follows:
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As I read that one has to insert the XP disk after or during the insertion of the Basic Upgrade disk.
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You dont require an XP disk ATALL!
You simply need XP installed.
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...is MS going to ask for the KEY to the XP? or just he key that comes with the retail version of Vista Basic - or both product keys?
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The installation will only ask for the Vista product key.
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...something goes wrong. Does one lose both XP and Vista? Or will the system just reject Vista and revert back to XP?
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If something goes wrong then most likely both operating systems will not be functional. This could be an issue as you need XP installed to upgrade to Vista with an upgrade key. However, using the method shown here:
http://www.vistababble.com/forums/in...sta-vista.html you would be able to get vista installed (and completely legally as you still have a redundant XP license).
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From what I have read, all of this is going to be a 'clean install' using the Basic Upgrade retail disk.
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Correct, you must do a clean install from XP pro to home basic.
Now... do I have permission to tell you why getting BASIC is a bad idea?
crabby